Zopa secures £32m funding to launch as a bank
Peer-to-peer lender Zopa has completed £32m worth of funding transactions to launch as a next generation bank.
The transactions, completed last week, will help build the bank’s infrastructure in preparation for its submission of a bank license application later this year.
The lender announced its plans to set up as a bank,following regulatory approval, in 2016. In May this year, Zopa gained full authorisation from the Financial Conduct Authority (FCA).
At the time of authorisation Giles Andrews, co-founder and chairman of Zopa, said the business has been campaigning for peer-to-peer lending to be a regulated activity for a number of years.
The recent investments were led by Wadhawan Global Capital, an Indian financial services group, and Northzone, a European venture capital fund. Following this investment, Kapil Wadhawan, chairman of Wadhawan, will join the Zopa board.
Zopa plans on offering FSCS-protected deposit accounts for savers, a range of peer-to-peer investment products for investors, and personal loans, car finance, and credit cards for people looking to borrow.
Of the peer-to-peer investment products for investors, Zopa will offer a flexible innovative finance ISA (IFISA) upon pending approval from HMRC to become an ISA manager.
The IFISA will offer target returns of up to 6.1 percent. Zopa will give existing investors priority access to this product ahead of new customers.