Zopa

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Zopa Bank Ltd. (Template:IPA-cen[1]) 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.[2][3] It was founded in Buckinghamshire in 2004 by a team from the internet banking company Egg Banking.[4][5]

Zopa grew steadily[6] in the years prior to the 2008 financial crisis. It navigated the period with no losses to investors' capital and only a small dip in returns during 2008.[7][8]

In September 2016, the first portfolio of Zopa loans was securitised on the European markets.[9]

In January 2017, Zopa became the first UK based peer-to-peer lending company to lend more than £2 billion worth of loans.[10] Zopa became fully regulated by the Financial Conduct Authority in May 2017.[11][12] Following FCA authorisation, and HMRC approval as an Individual Savings Account (ISA) manager, Zopa started offering Innovative Finance ISA products in June 2017.[13]

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.[14][15] In August 2018, Zopa obtained £44 million in funding for the launch of its new digital challenger bank.[16] In December 2018 the company was awarded interim banking licences by the UK financial regulators, the FCA and PRA.[17]

Retail banking services – including deposit accounts and a credit card – were launched in June 2020, soon after a full banking licence was awarded.[18] 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.[19]

In June 2021, CEO Jaidev Janardana stated that Zopa could be taken public as early as the last quarter of 2022.[20] In October of that year, the company raised $300Script error: No such module "String".million from Softbank Vision Fund and other investors, implying a $1Script error: No such module "String".billion valuation.[21] A further £75m was raised from existing investors, not including Softbank, in early 2023.[22]

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.[23]

In early 2023, Zopa had around 850,000 customers, over £3Script error: No such module "String".billion in deposits and £2Script error: No such module "String".billion on loan. The company indicated that it expected to make a profit over the full year for the first time in its history.[22]

In February 2023, it was announced Zopa had acquired the Newcastle-under-Lyme-headquartered, 'buy now, pay later’ (BNPL) platform DivideBuy.[24]

In December 2024, Zopa raised $87 million in equity at a valuation exceeding $1 billion, prioritizing profitability and growth over an IPO amidst a sluggish tech IPO market.[25]

Products and services

Peer-to-peer lending

Zopa enabled investors to lend to UK consumers through its peer-to-peer lending platform.[26] By 2021, around £6Script error: No such module "String".billion in loans had been processed.[21] Borrowers could take out loans between £1,000 and £25,000.[27] Typically individuals used these to funds to help buy a car, consolidate debts, cover home improvements or weddings.[28]

Investors could choose from four investment products[29] based on their risk and return appetite. Investors' money was split across multiple borrowers.[30] 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[23] 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,[31] and a money management app which makes use of data made available by the introduction of Open Banking.[32] A current account was launched in March 2025.[33]

Corporate identity

The company's main office is at London Bridge.[34] Since 2017, Zopa also has a development centre in Barcelona, Spain.[35]

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.[36]

See also

References

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External links

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Template:Peer-to-peer lending companies

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