Zopa launched way back in March 2005, becoming the genesis behind the global movement that we now call alternative finance. Born in a barn in Buckinghamshire, the platform laboured for 5 long years as the UK’s sole P2P lending outfit – ably weathering a recession in the process. Before being joined in Britain by second-movers Funding Circle and RateSetter in 2010, the Zopa spark gave rise to Prosper and Lending Club in the US. Not to mention every subsequently launched online, marketplace-based method of making loans that we at AltFi so feverishly cover.
The industry that arose in the wake of Zopa’s emergence is now worth more than $10bn worldwide. A more precise value is difficult to come by, owing to the sizable but frustratingly opaque state of the P2P market in Asia.
Zopa remains the largest peer-to-peer lender in the UK in terms of cumulative lending volumes, having matched £764m to date. The platform reportedly expects to hit the £1bn mark this summer. As you might imagine, there are far too many accomplishments in the platform’s decorated 10 year history to reel off each and every one, but we’ve listed a few gems below:
Lent money from over 58,000 individual lenders.
Lent money to more than 107,000 individual borrowers.
An average rate of return of 5.6% (post fees and losses from bad debt) delivered to lenders over the past decade.
A 0.58% historic default rate between 2005 and 2015.
Over £46m in interest returned to Zopa lenders so far, of which nearly a third (£14m) was returned in 2014 alone.
Lastly, consider this: a £10,000 investment in Zopa on day 1 of the platform's lifespan would be worth 70% more today (£17,000) due to the compound interest effect of relending via the platform.
The points about returns are especially important. The industry that Zopa birthed was founded around the principle of creating a better deal for the user – and on the investment side of the equation that meant providing bank-beating interest rates. You need only glance at the Liberum AltFi Returns Index (LARI) to get a sense of the consistency of returns generated by its three constituents (Zopa,RateSetter and Funding Circle).
Based on the above-noted 0.58% default rate, Zopa has maintained the best track record in managing risk of any UK bank or P2P lender over the past decade. The 70% return based on 10 years of continuous re-investment via the Zopa platform massively outperforms the rise in house prices over the same stretch of time (23.7% according to the Nationwide House Price Index) and significantly tops the overall return that could have been accrued from a typical UK Savings Account (36%).
Giles Andrews, Co-Founder and CEO of the platform, offered his take:
“Our customers are at the heart of what we do and this is reflected in the multiple awards we’ve won for outstanding customer service.”
“It’s hard to believe that we’ve gone from an idea in a barn to a global industry now lending billions of pounds in the course of a decade. We created Zopa because we saw the potential to bring people together over the internet without having to go through a bank. This has prompted a revolution in the financial sector worldwide. We are very proud to have pioneered a new way to do finance by allowing people to achieve their life goals through lending or getting a loan at a great rate. I see Zopa becoming the norm in the same way EBay has. Peer-to-Peer lending is certainly here to stay!”
Massive congratulations to the Zopa team.
