From Zopa to bank with new £44m funding
Zopa has completed a new funding round with an extra £44 million in its pockets, aimed at expanding traditional banking as it sees trouble looming on the horizon for other P2P businesses.
The P2P lender applied for a banking licence in 2016, with aims to launch a fully digital bank, and it is understood that this new funding will give the firm the needed oomph to meet the needed standards to gain the licence.
To be fair, they did say it could take up to two years.
Jaidev Janardana, Zopa chief executive, says: “It allows us to offer a wider choice of products and to help our customers make smarter choices with their money. This further injection of capital takes us a step closer to that vision.”
The bank is the next step in the firm’s road map, taking this investment and putting it mostly onto retail deposits. This way, Zopa circumvents the regulatory obstacles that many crowdfunded firms are seeing.
After saving products, credit card offerings are understood to be on the cards – no pun intended.
To put things in context, the Financial Conduct Authority (FCA) last week highlighted that “risk and reward are always balanced appropriately” on P2P platforms (which it wasn’t very happy about), and that it plans to limit how much these can advertise to retail investors.
The company hired a number of former banking executives to form a dedicated new bank board earlier this year.
If you feel like taking a look at their balance sheets, they released a report on profitability. Have at it!
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