UK challenger Zopa looks to accelerate growth with £75m funding
UK challenger bank Zopa has raised £75 million in Tier 2 capital as it looks to accelerate its expansion plans.
The announcement brings the total capital raised by the bank to £530 million to date, with £150 million raised over this year alone.
The bank says it will use the new funding to “fuel [its] continuous growth and expansion”.
This continuous growth was highlighted by the bank’s latest financial results, which showed it has secured £3.5 billion in deposits to date, approved around £8 billion in personal loans and issued 470,000 credit cards.
Its digital banking proposition, which launched in the UK in 2020 following regulatory licensing, includes personal loans, credit cards, savings accounts, money management tools and car financing options, and its one million active customers drive an annualised revenue run rate of £250 million. The bank expects to increase its customer base to five million by 2027.
Reflecting on the new funding, the bank’s CEO, Jaidev Janardana, describes the raise as “a clear market validation of Zopa Bank’s financial performance” and indicative of investors’ strong confidence in its growth.
“As a profitable business, it is also a seal of approval for our responsible and sustainable business model, our strong unit economics and our vision to build Britain’s best bank,” continues Janardana, adding the bank aims to “serve more customers across more product categories as we get even closer to reaching full-year profitability in 2023 for the first time”.
While it’s reportedly mulling the idea of a public offering, the bank has instigated a series of initiatives to ensure its longevity amid current economic challenges, including the appointment of Kate Erb and Peter Donlon as chief operating officer (COO) and chief technology officer (CTO), respectively, and its February acquisition of DivideBuy to deliver a new buy now, pay later (BNPL) offering.