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UK Neobank Zopa Secures Another $93M in Funding

Summary:
With £3 billion in deposits, over £2 billion in loans on its balance sheet, and more than 400,000 credit cards issued since its launch in 2020, Zopa has rapidly established itself as a prominent player in the UK banking landscape.  Zopa, a UK-based online banking company, has achieved a significant milestone, securing an additional million in funding to fuel its growth. The investment round, primarily consisting of debt financing, marks an important step as the company prepares for its initial public offering (IPO) which was previously suspended due to poor economic conditions. According to reports, the recent funding, totaling £75 million ( million), was led by IAG SilverStripe, along with participation from other investors.  The company has previously raised the same amount in

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With £3 billion in deposits, over £2 billion in loans on its balance sheet, and more than 400,000 credit cards issued since its launch in 2020, Zopa has rapidly established itself as a prominent player in the UK banking landscape. 

Zopa, a UK-based online banking company, has achieved a significant milestone, securing an additional $93 million in funding to fuel its growth. The investment round, primarily consisting of debt financing, marks an important step as the company prepares for its initial public offering (IPO) which was previously suspended due to poor economic conditions.

According to reports, the recent funding, totaling £75 million ($93 million), was led by IAG SilverStripe, along with participation from other investors.  The company has previously raised the same amount in equity funding in February, bringing its valuation to unicorn status.

Zopa Hits New Milestone of 1 Million Customers amid Successful Funding

The successful funding rounds demonstrate the continued trust and confidence investors have in the company’s vision. To date, Zopa has garnered a substantial total of £530 million in funding since its launch in 2020. Furthermore,  the company said it has achieved a milestone of 1 million customers following the recent fundraising.

The online banking company plans to use the capital to fortify its financial stability while strategically positioning itself for potential acquisitions.

The startup aims to maintain its growth momentum by expanding its product offerings, which include loans, savings, deposits, Buy Now, Pay Later (BNPL) solutions, and a diverse range of other financial services. This influx of capital is expected to play a pivotal role in propelling the company towards its ambitious goals.

Zopa announced the launch of its BNPL services earlier this year along with a long-term savings account offering known as an Individual Savings Account (ISA) for UK customers. At the time, the company’s CEO Jaidev Janardana hinted at plans to launch two more products next year to further enhance the neobank’s suite of financial services.

Zopa Forecasts to Generate $312 Million in Revenue This Year

While many startups face challenges in securing equity investments, debt financing has been gaining prominence. A recent report indicated that, as of May, debt financing had overtaken equity as the primary source of funding for startups. This trend underscores the appeal of debt financing as a swift and equity-free method of raising capital.

Zopa’s decision to pursue debt financing is rooted in its strong financial position. The neobank is already generating positive cash flow and is on track to achieve profitability for the full fiscal year—an important milestone in its journey. Based on its current growth trajectory, Zopa anticipates generating £250 million ($312 million) in revenue this year.

Despite its financial success, the company remains committed to the UK market, emphasizing the abundant opportunities within the country. The company said it has no plans to expand its business offerings outside the country. CEO Janardana believes that the UK market has enough potential to sustain the firm.

“There is so much potential in the UK today that we don’t need to expand internationally in the immediate future,” said Janardana.

Meanwhile, Zopa’s success is underpinned by its distinctive approach, blending digital innovation with 17 years of lending experience and a lending portfolio exceeding £8 billion in approved personal loans. As a fully licensed bank, the company adheres to the same rigorous standards as traditional high street banks, ensuring customers benefit from identical safeguarding measures, including deposits protected by the Financial Services Compensation Scheme (FSCS) up to £85,000.

With £3 billion in deposits, over £2 billion in loans on its balance sheet, and more than 400,000 credit cards issued since its launch in 2020, Zopa has rapidly established itself as a prominent player in the UK banking landscape.

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Chimamanda U. Martha

Chimamanda is a crypto enthusiast and experienced writer focusing on the dynamic world of cryptocurrencies. She joined the industry in 2019 and has since developed an interest in the emerging economy. She combines her passion for blockchain technology with her love for travel and food, bringing a fresh and engaging perspective to her work.

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