Zopa’s status as a unicorn is “markedly improved” by the new funding.
Zopa just got a huge £75 million in funding, which goes against the trend of funding rounds and valuations going down.
The digital bank that wants to be “Britain’s best bank” said the deal solidifies and “significantly improves” its status as a unicorn, but it didn’t say what its new valuation was.
In October 2021, SoftBank’s Vision Fund 2 raised $300 million to value it at $1 billion. After 21 months, it generated a profit.
Zopa plans to use the new funding, which will be led by existing investors, to speed up its growth this year. Mergers and acquisitions could start as early as this quarter, the company said.
“Today’s equity round reaffirms the support of our investors despite the challenging economic environment,” Zopa CEO Jaidev Janardana said
“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 greatly increased the number of financial products it offered last year and plans to keep doing so after a few profitable months in 2022 and the “very likely” chance that it will be profitable for the whole year in 2023.
The bank’s income keeps going up by more than 100% every year. It has received £3 billion in deposits, loaned £2 billion, and issued over 400,000 credit cards.
“Zopa takes an agile and dynamic approach to credit risk. Which means it has continued to lend responsibly in a changing environment,” Janardana said.
“As a result, our business remains resilient with record loan origination volumes, stable credit performance comparable to pre-pandemic levels, and continued innovation.”
In October, the bank was in discussions to raise $100 million (£81 million) before an IPO (IPO).
Zopa had expected to go public in 2022, but the market wasn’t ready. Now that they have raised almost that amount, we’ll be watching to see if an IPO is coming up.
