Zopa has announced that it has raised an additional £20m from existing investors. This represents a significant vote of confidence following the initial success of its bank launch and growth of its latest products.
Only nine months on from gaining its full bank licence, neobank Zopa has successfully launched Fixed Term Savings accounts and an innovative credit card to UK consumers. These products are in addition to its award-winning personal loans and pioneering auto finance solution.
The digital bank has already attracted over £250m in deposits and become a top 10 credit card issuer in the UK in terms of new customers originated. Alongside the continued growth of its personal loans business, the launches put Zopa in a uniquely strong financial position. Zopa has seen annualised revenue per customer almost doubling across the period since launch. Unique among digital neo banks, Zopa’s focus and proven capabilities in lending provide a clear path to profitability.
The funds will be used to further fuel Zopa’s growth at a time when the company believes there is even more demand for its products. As a result of Coronavirus and the accompanying periods of lockdown, customer’s needs and behaviors have changed. However, Zopa has seen a sustained need for access to credit as people look to carry out home renovation, buy cars and revive postponed wedding plans. And even more positively, the credit quality of these loans has been better than expectations. Similarly, many people have managed to accrue savings during the pandemic due to decreased opportunities for discretionary spending – and are now looking for competitive rates on their savings – which Zopa’s fixed term savings product provides.
Jaidev Janardana, Zopa’s CEO said: “Less than a year since launching our bank, we have exceeded our plan for growth, both in terms of customers and balance sheet. This capital injection will enable us to continue on this accelerated path. Our strong entry to the UK savings and credit card markets shows the organic appeal of our products and we are happy to have investors who share our excitement at the opportunity to serve more customers across more product categories.”
To date, Zopa has lent out over £5bn to low-risk UK customers via its unsecured loans, credit cards and car finance products.
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