Zopa raises £20m to expand digital bank, eyes profits
The fintech lender launched its bank just nine months ago after a number of delays but says it has seen good performance of loans through the pandemic as well attracting new customers from its expansion into savings and credit cards.
Zopa has closed a new £20m fundraise from existing investors including Augmentum, Alternative Credit Investments, managed by Waterfall Asset Management, Venture Founders and IAG Silverstripe who led the round.
The new fundraise comes just nine months after the launch of Zopa’s digital bank as well as the launch of savings products and its credit card. Zopa scored its full banking license, after lengthy delays, in June 2020 but says it is now on a clear path to profitability helped along by growth in its new savings and lending products.
Jaidev Janardana (pictured), Zopa’s CEO said: “Less than a year since launching our bank, we have exceeded our plan for growth, both in terms of customers and balance sheet. This capital injection will enable us to continue on this accelerated path.”
“Our strong entry to the UK savings and credit card markets shows the organic appeal of our products and we are happy to have investors who share our excitement at the opportunity to serve more customers across more product categories.”
Since launching the bank, annualised revenue per customer is now almost doubling and it says it has now attracted c.£250m in deposits for its fixed-term savings accounts as well as become a top 10 credit card issuer.
While Coronavirus economic fallout has been a headwind for lenders, Zopa says it has seen a sustained need for access to credit as people look to carry out home renovation, buy cars and revive postponed wedding plans. The credit quality of these loans has also been better than expectations, it says.
Similarly, many people have managed to accrue savings during the pandemic due to decreased opportunities for discretionary spending – and are now looking for competitive rates on their savings.
To date, Zopa has lent out over £5bn to low-risk UK customers via its unsecured loans, credit cards and car finance products.