While the rest of the fintech world is struggling through investment rounds, Zopa Bank has announced they have raised $92 million. The bank broke the news on Feb. 2, 2023.
The latest funding round is said to drive the bank through the next growth phase to become “Britain’s best bank” and was led by existing investors.
“Today’s equity round reaffirms the support of our investors despite the challenging economic environment,” said Jaidev Janardana, CEO at Zopa. “It clearly validates Zopa’s responsible, sustainable, and profitable approach to lending, our strong unit economics, and our vision.”
Zopa is what some in the industry call one of the “original fintechs”—gaining 17 years of lending experience and receiving a full banking license in 2020.
The bank’s revenue has seen consistent growth despite challenging economic conditions. The company reports that it has surpassed 100% YOY, fuelled by the continued expansion of its digital-first financial products.
‘Agile approach’
“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 likely convert into full-year profitability in 2023 for the first time.”
The funding will be used to meet the company’s growing balance sheet and to support M&A dealmaking that could begin in the current quarter. The ongoing economic challenges have caused valuations to drop, and Zopa may be taking this opportunity to snap up deals.
Janardana told Techcrunch that the potential acquisitions would aim to increase digital products for customers, and the company is looking into exploring B2B solutions and extending its payments offerings.
While the funding round reached an official total of $92 million, Janardana also suggested future acquisitions may surpass this amount.
