Digital bank Zopa has raised £68 million in an equity funding round as it prepares to launch its flagship current account in 2025.
It is also promising a “pioneering GenAI proposition that reinvents how people interact with their money”. Its current innovations enable customers to improve their financial health and gain access to better-priced credit.
Zopa recently partnered with Britain’s largest electricity supplier, Octopus Energy, to enter the UK’s renewable energy market, and with the retail giant John Lewis to offer personal loans directly to its 23m customers.
The firm has over 1.3m customers itself and £5 billion in deposits and says it expects to double profits in 2024 on a 35% jump in annual revenue, having lent more than £13bn to consumers in the UK to date.
It is forecasting imminent market expansion and acquisitions.
The round was led by A.P. Moller Holding, one of the largest direct investors in Denmark with $32 billion of Net Asset Value, and included significant participation from existing investors.
“Today’s fundraise validates our financial performance and growth potential,” said Jaidev Janardana, CEO. “Since launching our bank in 2020, we’ve consistently offered financial products that offer great value and ease to our customers, supporting our vision to build Britain’s best bank.
“We are thrilled to have investors who share our excitement at the opportunity to serve more customers across more product categories as we aim to become the go-to bank for millions of consumers.”
Chetan Mehta, head of growth equity at A.P. Moller Holding, added: “We are excited to support Zopa on its journey to revolutionize the UK’s financial services industry. Zopa’s remarkable customer centricity enables it to deliver lasting value and positive impact in the financial lives of millions of UK consumers.
“Today’s investment also reflects our confidence in Zopa’s robust and profitable business model that aligns with our commitment to sustainable, long-term growth.”
Unlike many FinTechs or e-money institutions, Zopa holds a full banking licence, ensuring it adheres to the same regulatory standards as traditional banks.
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