Challenger bank Zopa raised a £20m round led by IAG Silverstripe to help the firm further expand its footprint.
The round saw participation from Augmentum, Waterfall managed Alternative Credit Investments and Venture Founders.
While the firm was launched in 2005, initially as a peer-to-peer lending service, it launched its digital bank only a year ago.
Just nine months after gaining its full bank license in June last year, the neobank launched a host of features such as fixed-term savings accounts, credit cards, unsecured loans and auto-finance for its UK customers.
At a time when the sector continues to witness increasing demand for digital banking caused by the Covid-19-induced lockdown, customer’s changing needs and behaviours prove the need for better services, the firm said. This new cash injection portrays a significant vote of confidence following the initial success of its app-only bank launch and growth of its fixed-term savings product.
Commenting on the importance of digital bank services, Zopa CEO Jaidev Janardana said, “Less than a year since launching our bank, we have exceeded our plan for growth, both in terms of customers and balance sheet. This capital injection will enable us to continue on this accelerated path.
“Our strong entry to the UK savings and credit card markets shows the organic appeal of our products and we are happy to have investors who share our excitement at the opportunity to serve more customers across more product categories.”
With an annualised revenue per customer almost doubling in the period since its inception, Zopa has lent out over £5bn to low-risk UK customers via its unsecured loans, credit cards and car finance products to date, it claimed.
The digital bank has already attracted over £250m in deposits and aims to become a top ten credit card issuer in the UK in terms of new customers originated, it added.
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