Zopa

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For other uses, see Zopa (disambiguation).

Zopa Bank Ltd.
Company typeLtd.
IndustryPersonal financial services
FoundedMarch 2005; 19 years ago (2005-03)[1][2]
FoundersRichard Duvall
James Alexander
Giles Andrews
David Nicholson
Tim Parlett
HeadquartersCottons Centre,
Tooley Street, London
,
United Kingdom
Key people
Jaidev Janardana (CEO)[3]
ProductsP2P lending,[4] retail banking
RevenueIncrease £222M [5] (2023)
Increase £15.8M (2023)

Zopa Bank Ltd. (/ˈzoʊpə/[6]) is a British online bank which offers deposit accounts, personal loans and credit cards. It began as the world's first peer-to-peer lending company in 2005 and gained a full banking licence in 2020. The peer-to-peer side of its business closed in December 2021.

History

Zopa was launched in the UK in March 2005 as an arranger of peer-to-peer lending, connecting investors with individuals seeking loans.[7][8] It was founded in Buckinghamshire in 2004 by a team from the internet banking company Egg Banking.[9][10] Zopa grew steadily[11] in the years prior to the financial crisis of 2007–2008. It navigated the period with no losses to investors' capital and only a small dip in returns during 2008.[12][13] In September 2016, the first portfolio of Zopa loans was securitised on the European markets.[14] In January 2017, Zopa became the first UK based peer-to-peer lending company to lend more than £2 billion worth of loans.[15] Zopa became fully regulated by the Financial Conduct Authority in May 2017.[16][17] Following FCA authorisation, and HMRC approval as an Individual Savings Account (ISA) manager, Zopa started offering Innovative Finance ISA products in June 2017.[18] In November 2016, Zopa announced its intention to apply for a banking licence so it could expand the range of financial products it offers to UK consumers.[19][20] In August 2018, Zopa obtained £44 million in funding for the launch of its new digital challenger bank.[21] In December 2018 the company was awarded interim banking licences by the UK financial regulators, the FCA and PRA.[22] Retail banking services – including deposit accounts and a credit card – were launched in June 2020, soon after a full banking licence was awarded.[23] By March 2021, Zopa had attracted around £250m in fixed-term savings accounts and had become a "top ten" credit card issuer. In the same month, the company raised £20m further capital from its existing lenders.[24] In June 2021, CEO Jaidev Janardana stated that Zopa could be taken public as early as the last quarter of 2022.[25] In October of that year, the company raised $300 million from Softbank Vision Fund and other investors, implying a $1 billion valuation.[26] A further £75m was raised from existing investors, not including Softbank, in early 2023.[27] In December 2021, Zopa announced it would be winding up the peer-to-peer side of its business, including buying back the existing loans of investors.[28] In early 2023, Zopa had around 850,000 customers, over £3 billion in deposits and £2 billion on loan. The company indicated that it expected to make a profit over the full year for the first time in its history.[27] In February 2023, it was announced Zopa had acquired the Newcastle-under-Lyme-headquartered, 'buy now, pay later’ (BNPL) platform DivideBuy.[29]

Products and services

Peer-to-peer lending

Zopa enabled investors to lend to UK consumers through its peer-to-peer lending platform.[30] By 2021, around £6 billion in loans had been processed.[26] Borrowers could take out loans between £1,000 and £25,000.[31] Typically individuals used these to funds to help buy a car, consolidate debts, cover home improvements or weddings.[2] Investors could choose from four investment products[32] based on their risk and return appetite. Investors' money was split across multiple borrowers.[33] Investors then received monthly repayments of interest and capital, which they could re-lend to compound the interest. In December 2021, Zopa announced that it would withdraw from peer-to-peer lending[28] with the intent to repay all investors no later than 31 January 2022.

Banking and credit cards

Zopa offers FSCS-protected deposit accounts, personal loans, credit cards,[34] and a money management app which makes use of data made available by the introduction of Open Banking.[35]

Corporate identity

The company's main office is at London Bridge.[36] Since 2017, Zopa also has a development centre in Barcelona, Spain.[37] The company's name comes from "zone of possible agreement", a negotiating term identifying the bounds within which agreement can be reached between two parties.[38]

See also

References

  1. ↑ Akst, Daniel (5 February 2006). "Where Lender Meets Borrower, Directly". New York Times. No. Business Day. New York, N.Y., United States. The New York Times Company. Retrieved 9 March 2017.
  2. ↑ 2.0 2.1 Werdigier, Julia (10 December 2012). "RIT Capital to Take Stake in British Financial Start-Up". The New York Times. No. DealBook. New York, N.Y., United States. The New York Times Company. Retrieved 9 March 2017.
  3. ↑ "Zopa CEO Jaidev Janardana: Leading UK P2P Lending with Superior Service, Transparency and Cutting-Edge Fintech". McGill University.
  4. ↑ Scott, Mark (9 June 2014). "A Lift for One of London's Financial Tech Start-Ups". New York Times. No. DealBook. New York, N.Y., United States. The New York Times Company. p. B3. Retrieved 9 March 2017.
  5. ↑ "Zopa Bank reports first full year profit". www.cnbc.com. 14 November 2024. Retrieved 14 November 2024.
  6. ↑ Zopa (15 October 2021). "Why you should join Zopa: a message from our new Chief People Officer". YouTube. Archived from the original on 30 January 2024. Retrieved 30 January 2024.
  7. ↑ Prosser, David. "Happy Birthday Zopa, The Inventor Of P2P". Forbes. Retrieved 11 April 2018.
  8. ↑ "Q&A: Online lending exchange". BBC News. United Kingdom: BBC. 7 March 2005. Retrieved 4 July 2016.
  9. ↑ Evans, Judith (14 August 2015). "My Money — Giles Andrews, Zopa chief". Financial Times. Nikkei. Retrieved 8 March 2017.
  10. ↑ "Zopa opera". computing.co.uk. 6 September 2007. Retrieved 3 October 2015.
  11. ↑ "P2P lending: where will the P2P industry go next? - Verdict". www.verdict.co.uk. 19 February 2018. Retrieved 11 April 2018.
  12. ↑ Ficenec, John (26 July 2015). "How safe is peer-to-peer lending?". The Daily Telegraph. ISSN 0307-1235. Retrieved 11 April 2018.
  13. ↑ Jones, Rupert (15 February 2014). "The major peer-to-peer lenders". The Guardian. Retrieved 11 April 2018.
  14. ↑ Hale, Thomas (26 September 2016). "Debut securitisation for Zopa loans". United Kingdom: Financial Times. Nikkei. Retrieved 10 November 2016.
  15. ↑ "Peer-to-peer lender Zopa passes £2 billion loans milestone". Business Insider. Retrieved 11 April 2018.
  16. ↑ Williams, Aime. "Zopa gets FCA approval as peer-to-peer lender". Financial Times. Retrieved 15 May 2017.
  17. ↑ Barber, Lynsey (11 May 2017). "Zopa just got full approval as a P2P lender from the FCA". City A.M. Retrieved 11 April 2018.
  18. ↑ Suter, Laura (26 May 2017). "Zopa Isa offering up to 6.1pc finally available". The Telegraph. ISSN 0307-1235. Retrieved 11 April 2018.
  19. ↑ Hurley, James (17 November 2016). "Peer-to-peer lender Zopa to launch bank". The Times. ISSN 0140-0460. Retrieved 11 April 2018.
  20. ↑ Dunkley, Emma (16 November 2016). "Peer-to-peer lending pioneer seeks banking licence". Financial Times.
  21. ↑ "Digital Bank: Zopa Raises £44 Million to Help Fuel Expansion, "Launching Our Bank is a Key Next Step"". Crowdfund Insider. 3 August 2018. Retrieved 7 August 2018.
  22. ↑ "Zopa, the UK P2P lending company, secures bank license". TechCrunch. Retrieved 4 December 2018.
  23. ↑ Megaw, Nicholas (23 June 2020). "P2P lender Zopa wins UK banking licence". Financial Times. Retrieved 22 September 2020.
  24. ↑ Lanyon, Daniel (22 March 2021). "Zopa raises £20m to expand digital bank, eyes profits". AltFi. Retrieved 27 March 2021.
  25. ↑ Finn, Aisling (29 June 2021). "Zopa is setting its sights on a 2022 IPO". AltFi. Retrieved 7 July 2021.
  26. ↑ 26.0 26.1 Lunden, Ingrid (18 October 2021). "Zopa raises $300M at a $1B valuation to expand its P2P lending and savings neobank in the UK". TechCrunch. Retrieved 23 October 2021.
  27. ↑ 27.0 27.1 Lunden, Ingrid (2 February 2023). "Zopa, the UK neobank, raises $93M more at a $1B+ valuation". TechCrunch. Retrieved 4 February 2023.
  28. ↑ 28.0 28.1 "Zopa exits peer-to-peer lending". AltFi. 7 December 2021. Retrieved 7 December 2021.
  29. ↑ "Zopa acquires BNPL DivideBuy". AltFi. Retrieved 16 February 2023.
  30. ↑ Lewis, Martin. "Peer to peer lending: boost savings returns? - MSE". MoneySavingExpert.com. Retrieved 11 April 2018.
  31. ↑ "comparethemarket.com - Zopa loans". www.comparethemarket.com. Retrieved 11 April 2018.
  32. ↑ Beioley, Kate. "P2P platform Zopa re-opens to new customers". Financial Times.
  33. ↑ "Peer-to-peer lending explained - Which?". Which?. 21 June 2016. Retrieved 11 April 2018.
  34. ↑ "Zopa is 'pretty close to finishing' building its new bank". Business Insider. Archived from the original on 18 October 2017. Retrieved 11 April 2018.
  35. ↑ "Zopa boss Janardana details plans for customer-centric bank - AltFi Opinion". AltFi. Retrieved 11 April 2018.
  36. ↑ Hurst, Samantha (4 August 2016). "Zopa Relocates: Moves Into New London Bridge Digs". Crowdfund Insider. Crowded Media Group.
  37. ↑ "Zopa Establishes Development Center in Barcelona". Crowdfund Insider. 7 June 2017. Retrieved 15 May 2018.
  38. ↑ Cave, Andrew (5 March 2016). "Zopa aims for enough growth to stop explaining its name". The Daily Telegraph. ISSN 0307-1235. Retrieved 11 April 2018.

External links

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