Digital bank Zopa has raised £75 million to drive its next phase of growth, with acquisitions planned.
The deal cements and markedly enhances Zopa bank’s unicorn status, and was led by existing investors.
The funding will be used to meet the capital requirements of Zopa bank’s growing balance sheet, and to support M&A dealmaking that it says could kick off as early as this quarter.
Despite the economic uncertainty, London-based Zopa continues to grow revenue more than 100% year-on-year, fuelled by the continued expansion of its suite of digital-first financial products.
It says its products have helped customers to improve their financial health, gain access to better priced credit, access market leading saving products, and to transfer card balances in a way that helps pay down credit.
“Today’s equity round reaffirms the support of our investors despite the challenging economic environment,” said Jaidev Janardana, CEO. “It is a clear validation of Zopa’s responsible, sustainable and profitable approach to lending, our strong unit economics, and our vision to build Britain’s best bank.
“Zopa takes an agile and dynamic approach to credit risk which means it has continued to lend responsibly in a changing environment. As a result, our business remains resilient with record loan origination volumes, stable credit performance comparable to pre-pandemic levels, and continued innovation.
“We are happy to have investors who share our excitement at the opportunity to serve more customers across more product categories. This has already led to several profitable months in 2022 and will very likely convert into full-year profitability in 2023 for the first time.”
Since launching in 2020, Zopa bank has attracted £3 billion in deposits, more than £2bn of loans on balance sheet, and issued more than 400,000 credit cards.