UK-based digital bank Zopa has announced it secured a GBP 75 million in funding from existing investors to accelerate growth and explore potential mergers and acquisitions. Having a vision of becoming ‘Britain’s best bank’, the deal is believed to help cement and enhance the bank’s unicorn status, although its new valuation following the funding has not been disclosed.

Zopa strategy and how the funding falls into place Having hit a valuation of USD 1 billion in October 2021, when it had raised USD 300 million in a round led by Softbank Vision Fund 2, the company has since been on a journey to reach profitability which, as per the announcement, had happened within 21 months of the bank having been awarded a banking licence and exited the peer-to-peer lending space. Following this new funding led by already existing investors, Zopa is looking to have it utilised towards the acceleration of growth throughout 2023, with mergers and acquisitions dealmaking set to kick off as soon as Q1 2023. The company believes the equity round to be reaffirming of the support of their investors, in spite of the currently challenging economic environment, with bank representatives stating that it is a validation of Zopa’s responsible, sustainable and profitable approach to lending, their strong unit economics, and their vision in building Britain’s best bank.

Throughout 2022, the company had vastly expanded its suite of financial products and as stated in the announcement, it intends to continue doing so following several profitable months within the year, with the assumed possibility that it might convert into full-year profitability for 2023. AltFI detailed that the company has been increasing its revenue by over 100% year on year, having attracted to date GBP 3 billion in deposits, having over GBP 2 billion of loans on its balance sheet and having issued more than 400,000 credit cards. As advised by Zopa spokespersons, the company has an agile and dynamic approach to credit risk, meaning that it continued lending responsibly in the changing environment, which enabled their business to remain resilient.

In October 2022, the bank was rumoured to have been in talks to raise USD 100 million ahead of discussions regarding a potential initial public offering (IPO). The company was set on a 2022 IPO once, when it had hired JP Morgan to assist with a funding boost before launching a public flotation, however this was delayed as the market conditions were not right. Zopa offering developments throughout 2022 Through the course of 2022, the Zopa had announced a multitude of developments, from partnership to product launches.

Part of the most notable ones have been the February implementation of a savings account, which had the aim of helping UK-based consumers save better in a post-pandemic world, as well as the May-announced partnership with TrueLayer, following which it had gone live with account-to-account payments for its Smart Saver savings account. Shortly after in June of the same year, the company made public a regulated BNPL offering that prioritised transparency and customer protection, as it looked to bring an option for larger purchases to consumers that might have otherwise needed to save up for months or years. .