London fintech Zopa has borrowed £75 million from a group of existing investors as it aims to turn its first profit in 2023, its 19th year of operation.
The London Bridge-based firm, which was founded in 2005 as a peer-to-peer lending business but now focuses on digital banking, says it is currently profitable, and expects to make a full-year profit this year after surpassing one million customers. The firm said it is currently profitable.
Jaidev Janardana, CEO at Zopa Bank said: “Today’s financing is a clear market validation of Zopa Bank’s financial performance, pointing to strong investor confidence in its growth and in its ability to deliver strong financial performance despite the economic uncertainty.
“As a profitable business, it is also a seal of approval for our responsible and sustainable business model, our strong unit economics, and our vision to build Britain’s best bank.
“We are happy to have investors who share our excitement at the opportunity to serve more customers across more product categories as we get even closer to reaching full-year profitability in 2023 for the first time.”
A Zopa spokesperson said opting for debt instead of equity funding allowed Zopa to expand “without diluting the equity position of its shareholders”.
The digital bank expects to have five million customers by 2027.
Last month, the Standard revealed that Zopa re-estqablished a connection with the peer-to-peer lending market, 18 months after selling off that arm amid a crackdown on the sectorm as it acquired a £41 million portfolio of legacy P2P loans. Zopa had been a pioneer in the peer-to-peer lending market when it launched.
