British digital lender Zopa raises £220m in SoftBank-led round

Digital peer-to-peer Zopa raises £220m ahead of IPO

Zopa CEO Jaidev Janardana                                 
Zopa CEO Jaidev Janardana is steering digital peer-to-peer neobank Zopa to an expected IPO next year – Photo: Zopa
                                

Digital peer-to-peer bank Zopa has raised £220m ($300m) as the lender looks to grow its balance sheet lending ahead of a possible IPO in early 2022.

The funding round was led by SoftBank’s Vision Fund 2, with participation from Chimera Abu Dhabi and supported by existing investors IAG Silverstripe, Davidson Kempner Capital Management, Northzone and Augmentum Fintech.

The round, announced at this year's Global Investment Summit (GIS) 2021 in London, is Zopa’s largest funding round to date and takes it to unicorn status, with a valuation of $1bn or more.

The company is on track to reach profitability in the next 10 weeks, according to a statement.

Peer-to-peer lending

Zopa was founded in 2005 by Richard Duvall, James Alexander, Giles Andrews, David Nicholson and Tim Parlett as the world's first peer-to-peer lender. It gained its banking licence in June 2020 and has since attracted £675m in deposits for its fixed savings accounts, issued 150,000 credit cards and more than doubled its revenue per customer.  

Its recent partnerships with Clearscore and CreditLadder have also fuelled the expansion of Zopa’s product suite as it continues to address how customers borrow and save.

Zopa CEO Jaidev Janardana said: “In a very crowded ecosystem that often focuses on current accounts or other free money-management offerings, Zopa meets customer needs by focusing on how they borrow and save, the two things that have most impact on their finances.

“SoftBank Vision Fund 2’s investment into our future is a clear validation of Zopa’s responsible, sustainable and profitable approach to lending, and our vision to build the UK’s strongest performing bank with the most happy customers.” 

Sourav Sen, investor for SoftBank Investor Advisers, added: “We believe Zopa’s fast-growing market penetration reflects high customer demand for adaptable financial services within a usable platform that can be customised to their specific needs.

“Zopa is fast emerging as a leading player in the UK’s nascent neobanking sector and we are proud to partner with Jaidev and the team on this journey.” 

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