Zopa scoops £32m in a new investment round led by Indian conglomerate Wadhawan Group as it looks ahead to bank-build.
Zopa scoops £32m in a new investment round led by Indian conglomerate Wadhawan Group, as it looks ahead to bank-build.
Zopa, the UK’s original peer-to-peer lending platform, has clinched £32m in its first investment round since early 2014, when it raised £15m from Arrowgrass Capital Partners. The money will be used to help build-out the firm’s technology and product range in preparation for the submission of its banking licence application later this year.
The investment round has been led by India’s Wadhawan Global Capital Pvt Ltd and European venture capital fund Northzone. Northzone is also an investor in leading invoice finance platform MarketInvoice. Zopa co-founder Giles Andrews currently serves and non-executive director for both firms, having joined MarketInvoice in March. Wadhawan chairman Kapil Wadhawan will join Zopa's board to help lead its transition into a multi-faceted financial services firm.
News of the Wadhawan investment was first broken by Sky News over the weekend, but Zopa had not confirmed the fundraise until now. It has also clarified that £32m has been raised, rather than the reported £40m.
News of the fundraise comes at a busy time for Zopa. After having received its full authorisation from the regulator a few weeks ago, the firm is looking to launch its Innovative Finance ISA offering on 15th June. It will also be tweaking its investor product range by retiring its Safeguard fund, and merging its Access and Classic accounts into a new “Zopa Core” account.
Zopa announced its plans to pursue a banking licence in November of last year. Its intention is to launch FSCS-protected deposit accounts for savers and credit cards alongside its consumer loans marketplace.
Holding a banking licence is a capital intensive business – irrespective of whether the bank in question is a branch-based or online operator. Digital challenger Tandem saw the bulk of a planned £35m fundraise fall through in March, and was forced to cede the permissions which would have allowed it to take deposits. The lost £29m tranche would have buttressed the firm with enough capital to satisfy regulatory requirement. It is perhaps telling that Zopa has raised a similar amount of money.
"This investment gives us additional resources to continue our growth, support the launch of our next generation bank, and bring our award-winning products to even more people in the UK,” said Jaidev Janardana (pictured), CEO of Zopa.
Now in its sixth year, the AltFi London Summit returns on 18th March 2019 to 155 Bishopsgate. Last year proved to be a crucial turning point for the key players building the future of finance. Leading platforms launched oversubscribed IPOs, digital banks proliferated and mainstream financial institutions started their own disruptive propositions. With 2019 certain to be another landmark year, more questions will be asked by regulators with investor interest in disruption also poised for more rapid growth.