Zopa eyes £130m investment to secure bank future

By Daniel Lanyon on 2nd December 2019

P2P/Marketplace Lending

The peer-to-peer pioneer needs to secure an injection of capital in order to retain its banking license.

Zopa eyes £130m investment to secure bank future
Image source: Zopa

The original P2P lending platform Zopa is set to secure an investment of £130m, enabling the pioneering fintech lender’s pivot into banking to fully launch.

Zopa passed £4bn of loans facilitated through its core P2P business for UK consumers in March 2019, in part thanks to strong inflows to its ISA last year, with an expectation that it would see an accelerating run-rate of lending through 2019. Recently, however, the firm has been laser-focused on the launch of its “next-generation” bank.

With a looming regulatory deadline to raise money, the long-awaited launch had begun to look at risk of serious delay.

Zopa gained its bank licence with restrictions in December 2018, having been building its bank platform since early 2017, but needed new cash to meet regulatory capital requirements within 12 months of the issuance in order for it to convert into a full license.

The 11th-hour deal, first reported by Sky News yesterday, will cheer its investors who include Augmentum Fintech, which delayed the publication of its annual results last week citing Zopa’s impasse. 

December 3 is the cut off point to meet regulatory requirements, AltFi understands. Zopa last raised money in 2018, with a £60m round that closed in November of last year.

Zopa was the world’s first peer-to-peer lender, launching in 2005, and has remained private and has stuck to the UK consumer lending market so far while the likes of Funding Circle have both listed and expanded overseas.