Online P2P lender bags £44m to fund new bank
One of the UK's oldest FinTech firms has raised £44 million to fund the launch of its new bank as peer-to-peer lenders come under additional pressure from regulators.
Zopa secured the fresh capital from existing investors after applying for its UK banking Licence in 2016. The company is touted as the world's oldest P2P lender.
FinTech and banking business TrueFin, which owns a 15 per cent stake in the business, said in a London Stock Exchange statement that the investment of £44m will be made in tranches as Zopa's bank plans progress.
The Financial Conduct Authority (FCA) recently warned that it plans to limit how much P2P lenders like Zopa can advertise to retail investors as it was "not comfortable that risk and reward are always balanced appropriately" on the platforms.
"We aim to be the best place for money in the UK and we believe that launching our bank is a key next step," said CEO Jaidev Janardana.
"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.
"This further injection of capital takes us a step closer to that vision and we are delighted that our investors have supported us on this journey."
According to the FT, Zopa's bank is expected to launch with a focus on savings products before expanding into unsecured lending such as credit cards.
Zopa was the first P2P lender to launch in 2005 and has since given out more than £3.5 billion to UK consumers.
Last month the company published its latest financial results, revealing revenue growth of 40 per cent to £46.5 million and a profit of £1.5 million last year, compared with a loss of £5.8 million in 2016.
Janardana hailed 2017 as a "landmark" year, during which Zopa became the first P2P lender to receive full FCA authorisation.
A Sky News report earlier this year suggested that Zopa was considering an initial public offering (IPO) in the next couple of years.