Online lender Zopa to clinch £130m for challenger bank pivot
Peer-to-peer lending platform Zopa looks set to secure £130m in investment as it gears up to become a fully-fledged challenger bank.
The firm is finalising an investment which would allow it to complete its plans to combine its existing lender offering with a digital bank.
Last December the firm announced the plans after being granted a conditional licence in the UK by the Financial Conduct Authority (FCA).
The new funding comes just in time to allow the firm to put its plan into action before the licence, which required a raise of up to £150m before 3rd December, expires.
Sky News first reported that the firm was in talks to secure the funding, which reportedly comes from an entity linked to US-based IAG Capital Partners, and its UK investment vehicle Silverstripe.
The deal would reportedly give IAG Capital a majority stake in the firm.
South Carolina-based IAG Capital’s existing portfolio includes UK based direct lender and personal loan provider Bamboo, and cloud-based conversation intelligence platform Tethr, in which it invested $15m in September 2019.
Launched in 2005, London-based Zopa is considered one of the first peer-to-peer lenders, and has reportedly lent almost £5bn to consumers.
Its new digital bank offering is set to include a fixed-term savings product, credit card and money management app.
If the latest funding is successful, it will bring the total raised by the firm to approximately $466m or £602m.
Last year, CEO Jaidev Janardana said of its plans: "We aim to be the best place for money in the UK and we believe that launching our bank is a key next step.”
"It allows us to offer a wider choice of products and to help our customers make smarter choices with their money. We are excited to see this investment round take us closer to our goal.”