Zopa, a peer-to-peer (P2P) lender with the goal of becoming a challenger bank, has secured £140m in funding.
With the new funds, the FinTech can meet the regulatory capital requirements, which has been one of the major barriers before it can attain its banking licence. At present, Zopa is still operating with a restricted banking license and is working with the financial regulators to get the full certification.
IAG Silverstripe supplied the capital to the round, adding to its existing monitory investment it made last year.
Zopa began its quest for a full banking license last year after it closed a £60m funding round. At the time, the company’s CEO Jaidev Janardana stated that with the licence Zopa could get a step closer to becoming the “best place for money in the UK.”
The FinTech’s current offering is a P2P lending platform which helps consumers get access to personal loans ranging from £1,000 to £25,000.
Investors on the platform can split their money across several loans to reduce risk and help reach financial goals. Zopa will automatically split up a user’s investment and deploy it into opportunities that meet their risk-profile and targets.
Janardana said, “This new funding means we have concluded the fundraising phase of our bank mobilisation.
“We are excited that that once approved, Zopa will be able to launch its bank alongside its peer-to-peer business and offer a broader set of products to our customers.”
The UK is a hotbed for challenger banks. The six major players in the field have raised £1.3bn in funding since 2014. Monzo and Revolut are two of the market’s giants, which have both reached unicorn status.
Challenger banks are becoming popular around the world. The European Banking Authority recently released a new factsheet designed to help consumers better understand the services available and how to pick a provider.
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