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September 12, 2023

UK Neobank Zopa Secures £75M On Track to Become Britain's Premier Bank

UK's Digital Banking Revolution: Neobanks Changing the Game, Fueled by Investment

The world of neobanks in the United Kingdom has witnessed a steady ascent, with players like Monzo, Revolut, and Starling Bank revolutionizing the banking landscape. These digital-first institutions have shaken up traditional banking by offering a range of services entirely online, eliminating the need for physical branches.

One standout in this digital banking sphere is Zopa Bank, which entered the scene in 2020 and has rapidly garnered over $500 million in funding to become a prominent player. In a recent funding round, Zopa Bank secured an impressive £75 million in Tier 2 capital, pushing its total capital raised to £530 million, including £150 million from 2023.

IAG SilverStrip led this latest investment, following an earlier equity tranche raised just seven months ago. The freshly acquired capital will supercharge Zopa Bank's growth strategy as it strives to achieve its goal of becoming Britain's premier bank. The additional funds will bolster its financial standing, fuel potential acquisitions, and support the development of new products alongside its existing services.

Jaidev Janardana, CEO of Zopa Bank, expressed enthusiasm about the funding, emphasizing how it validates its financial performance and underscores investor confidence in its growth trajectory. The bank's profitable business model, strong unit economics, and vision to establish itself as Britain's top bank have garnered investor support.

Janardana also highlighted the bank's commitment to serving more customers across a broader range of product categories as it aims for full-year profitability in 2023.

Founded in 2005, Zopa has come a long way under the leadership of Giles Andrews, James Alexander, Richard Duvall, David Nicholson, and Tim Parlett. Earlier this year, the fintech unicorn acquired DivideBuy’s point-of-sale finance technology and lending platform, responding to consumer demand for simplified finances, especially for larger purchases.

With one million customers, an annualized revenue run rate of £250 million, and plans to serve five million customers by 2027, Zopa Bank has become a formidable presence. Since its debut in 2020, the bank has attracted £3.5 billion in deposits, managed over £2 billion in loans, and issued 470,000 credit cards.

Zopa Bank has long set its sights on an initial public offering (IPO), a move that could provide the financial reserves and visibility needed to continue its growth in the ever-evolving fintech landscape.

Neil Hodgson Coyle
Neil Hodgson-Coyle
Editorial chief at TechNews180
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