Zopa, the UK neobank, raises $93M more at a $1B+ valuation #
UK neobank Zopa has raised additional funds following a $300 million fundraising round led by SoftBank in 2021. The company that gives out loans, credit cards, and savings accounts has about 850,000 customers. It just got £75 million in equity investment, which it plans to use for product development, getting new customers, and merging with other companies.
In an interview, CEO Jaidev Janardana said that the funding came from the company’s current investors, including IAG Silverstripe, Augmentum, and Davidson Kempner Capital Management LP. He specifically noted that SoftBank did not participate in this round but is still a board member and investor. In its statement, the company says that the fundraising solidifies and significantly strengthens its status as a unicorn, pointing out that its last round of funding, which was $300 million, ended at $1 billion in 2021.
Some indicators suggest that this round took longer than usual. Rumours started swirling last September when speculation surfaced that Zopa was trying to raise around $100 million.
Some media outlets thought that this was the last round of fundraising before the company went public, but Gianardana has stayed quiet on the subject, citing the current state of the public markets and the lack of pressure on his company to go public as reasons for his silence.
This capital injection comes at a crucial time for the British economy.
This week, the IMF released a study predicting that the UK economy will be the only major economy to contract in 2023. Even though this difference isn’t clear-cut and a recession is always a possibility, challenger banks seem to be getting more and more customers who want lower rates and faster service than more established banks.
This month, the company’s savings accounts exceeded £3 billion, its lending business exceeded £2 billion (with a total of £8 billion in loans), and about 400,000 credit cards were used. In total, the company currently has about 850,000 subscribers. The corporation claims that its revenues have increased over the past year but does not provide specific figures. For the first time since its founding 17 years ago, it expects to make an annual profit in 2023.