P2P Lending Company Zopa Raises £20 Million Funding from Existing Investors

London-based peer-to-peer lending company Zopa has bagged £20 million in funding from its existing investors. The announcement comes after Zopa’s app-only bank picked up £250 million worth of deposits in just nine months following its launch last year. 

At present, nearly 27% of Brits have at least one account with a digital-only bank. That is three times more than what it was in 2019. It is safe to say that digital banking is growing in popularity driven by new technologies and product offerings. The arrival of the COVID-19 pandemic has had a positive influence on the adoption of digital banks in 2020. 

Zopa revealed that its digital bank performed well throughout the course of the pandemic and attracted new customers. 

SEE ALSO: Stripe Valuation Reaches $95 Billion after Recent Fundraising

More about the fundraising

Zopa raised a sum of £20 Million from existing investors which include Alternative Credit Investments and Augmentum. The latest fundraiser comes just nine months after Zopa launched its digital bank as well as a savings product. 

Zopa is set to utilize these funds to accelerate its growth when it firmly believes that demand for such products is on the rise. 

Despite facing delays in securing its full banking license, Zopa is now on a clear road to profitability. The increasing adoption of its new lendings and savings products is another factor that is contributing to its sustained growth. 

Jaidev Janardanam, CEO, Zopa, said that in under a year after launching the digital bank, Zopa has attained its goals, both in terms of balance sheet and the number of customers. He said, “This capital injection will enable us to continue on this accelerated path.” 

COVID-19 impact on customer behavior

It is hard to miss the impact the COVID-19 pandemic has had on different industries and people. The stringent lockdowns across the UK have changed customer requirements and behavior. 

Zopa has experienced a steep rise in demand for access to credit as customers look to lead a normal life again. The credit quality of loans has been on the higher side due to the lack of discretionary spending and high savings during the pandemic. 

More about Zopa

Based in London, Zopa was founded by Giles Andrews, David Nicholson, Richard Duvall, Tim Parlett, and James Alexander in 2005. After securing its full banking license, the neo bank launched an innovative credit card and Fixed Term Savings account for customers in the UK. Currently, Zopa has managed to attract £250 million in deposits and crawled into the top 10 credit card issuers list in the UK

Image Source:  Sale photo created by jcomp – www.freepik.com

Source:

[1] Barton. C (2021) “Digital banking statistics 2021” Finder [Online] available from:

https://www.finder.com/uk/digital-banking-statistics#:~:text=in%20the%20UK.-,The%20latest%20stats,14%20million%20people%20(2021).&text=4%20in%205%20(80%25),to%20a%20digital%2Donly%20bank.

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