Digital bank Zopa has secured £75 million ($95m) in Tier 2 capital to support its goal of becoming Britain’s leading bank. The funding will drive Zopa’s growth and expansion, adding to the £530 million raised by Zopa Bank, with £150 million raised this year alone.
Zopa Bank offers innovative solutions that aim to improve customers’ financial health by providing access to better-priced credit, market-leading savings products, and balance transfers that help pay down credit faster. Its underwriting models utilise AI and machine learning algorithms, which have been refined over the past eight years to deliver stable and exceptional credit performance, even in uncertain times.
Jaidev Janardana, CEO at Zopa Bank, hailed the financing as a clear demonstration of market validation, highlighting investor confidence in the bank’s growth and ability to achieve strong financial performance. Janardana stressed that the funding also serves as an endorsement of Zopa Bank’s responsible and sustainable business model, strong unit economics, and vision to become Britain’s best bank.
Zopa Bank stands out from other fintechs and e-money institutions as a licensed bank, which means it adheres to the same safeguards as major high-street banks. Customers’ deposits are protected by the Financial Services Compensation Scheme (FSCS) up to £85,000.
This year, Zopa Bank launched a regulated buy now, pay later (BNPL) product that offers a responsible alternative to existing options and a Smart ISA that enables savers to maximise their returns. The bank has successfully attracted £3.5 billion in deposits, holds more than £2 billion in loans on its balance sheet, and has issued 470,000 credit cards since its launch in 2020.
With a strong foundation of profitability, Zopa Bank currently serves 1 million customers, generating an annualised revenue run rate of £250 million. It aims to expand its customer base to 5 million by 2027.
Established in 2020, Zopa Bank is a tech unicorn that raised over $500 million to build Britain’s best bank. Leveraging its fintech P2P heritage, Zopa Bank brings 18 years of lending experience and £8 billion in approved personal loans to its operations.
Zopa Bank Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
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