After raising $300 million in a SoftBank-led round in 2021, UK neobank Zopa has signed a deal to put more money into its coffers. The company, which provides consumer lending services, credit cards and savings accounts and has around 850,000 customers, has raised £75m (approximately $93m). Get more customers and make acquisitions.
Interestingly, Zopa has not disclosed its main investors, but CEO Jaidev Janardana confirmed in an interview that the round is an internal round from an existing investor. Among those involved were investment firms Uprising and Augmentum.and the softbank No He will continue to be an investor and a member of the board in this round. The company said in a statement that the funding “consolidates and significantly strengthens” its unicorn status.
There are some indications that this round took a while to finish. There were funding rumors back in September of last year, when Zopa was said to be looking to raise around $100 million.
The reports also point out that this could be the company’s last fundraising before going public, but given the current state of the public market and, in his words, Zopa is under pressure to do so. Janardana declined to comment on the timeline, given the fact that there isn’t. So at this point.
This latest capital injection comes at a crucial time for the UK economy.
The IMF released a report this week predicting the UK will be the only major economy to contract in 2023. And businesses looking for better rates and faster service than what traditional banks offer.
The company said it had £3bn in deposits in its savings business this month, £2bn in its lending business (with £8bn of loans approved overall) and around 400,000 credit cards in circulation. It is said that there is. It currently has approximately 850,000 customers in various tranches of its business. Revenue figures aren’t disclosed, but the company says he doubled in the last year. In addition, for the first time since our founding 17 years ago, we are on track to become profitable on a full-year basis in 2023.
Still, growth in the loan and financial services market has definitely slowed, with a clear return to “pre-pandemic levels” of activity in 2022, Janardana said.
“Credit demand is down…and overall, if you look at industry loan demand, it grew only 5-10% last year.” Why? “But this hasn’t affected us as much as others.” LendingClub, another leading lending startup in the country, cut about 14% of its staff in January.
“Customers are going digital and looking for more options than going to the bank,” he continued. “More Informed Consumer Behavior [means] Our quantity continues to grow. “
Acquisitions and new products aim to capitalize on that, he said, while also helping the company diversify its business. will be He also wants to expand further into payments, in addition to credit, loans and savings products.
The current market is arguably under a lot of pressure on valuations, and the sea of fintech startups they’ve funded over the years are finding it harder to raise more money, and Zopa (and and others) have given them an opportunity to snap those assets. Janardana said £75m should not be considered the upper end of these valuations, as in previous rounds. Investors also want to tip more for the most interesting deals, he said, adding that so far Zopa has yet to consider taking on more debt.
