Home Zopa raises ÂŁ140m at eleventh hour in bid to secure banking licence
Loans, News

Zopa raises ÂŁ140m at eleventh hour in bid to secure banking licence

Roger Baird

Zopa said it has raised ÂŁ140m from a key investor just hours ahead of the deadline to secure a banking licence.

The world’s oldest peer-to-peer lender has struck its largest funding deal to date with IAG Silverstripe, an investment arm of IAG Capital.

Zopa said it now expects the new cash will allow it to meet capital requirements that enable it to gain full banking accreditation.

The bank had until midnight tonight to meet the requirements of City regulator, the Financial Conduct Authority, who awarded it a banking licence with restrictions on 3 December last year. Failure to do so meant it would have lost its limited licence.

 

Tougher deal terms

Zopa was in crunch talks with IAG Silverstripe over this funding as the peer-to-peer lender raced against time to secure the crucial cash.

IAG Silverstripe took part in the lender’s last cash call in November 2018, raising £50m.

However, at the weekend IAG Silverstripe was able to dictate tough terms, as it emerged from the deal as Zopa’s largest shareholder at a deeply discounted rate to last year’s fundraising.

A Zopa spokesman “would not comment” on holdings in the company or the details of the fundraising.

 

Cash in the bank

Zopa, led by chief executive Jaidev Janardana (pictured) said: “This new funding means we have concluded the fundraising phase of our bank mobilisation.”

He added: “We continue to hold our bank licence with restrictions and are working closely with the regulators to gain our full licence.”

Zopa, alongside Funding Circle and Ratesetter, is referred to as one of the UK’s Big Three peer-to-peer lenders. These lenders use algorithms rather than banks to match consumer borrowers with a diverse range of investors.

Zopa, founded in 2005, carried out its funding round at a turbulent time in the industry.

 

Hard times for peer-to-peer lending

Funding Circle, the biggest lender of this type in the UK, cut its growth forecast in half to 20 per cent in July.

Also, several peer-to-peer lenders such as Lendy and FundingSecure have collapsed this year, owning hundreds of millions to investors.

In July, Zopa was planning to raise as much as ÂŁ200m, according to Bloomberg, and that the lender was in discussion with private equity and sovereign wealth funds.

Zopa has originated over ÂŁ4bn of loans between 500,000 people, generating around ÂŁ250m of interest for investors, since it was founded 14 years ago.

 

 

 

 

 

 

 

 

Trusted & Regulated Stock & CFD Brokers

Rating

What we like

  • 0% Fees on Stocks
  • 5000+ Stocks, ETFs and other Markets
  • Accepts Paypal Deposits

Min Deposit

$200

Charge per Trade

Zero Commission on real stocks

Rating

64 traders signed up today

Visit Now

67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

Available Assets

  • Total Number of Stocks & Shares5000+
  • US Stocks
  • German Stocks
  • UK Stocks
  • European
  • ETF Stocks
  • IPO
  • Funds
  • Bonds
  • Options
  • Futures
  • CFDs
  • Crypto

Charge per Trade

  • FTSE 100 Zero Commission
  • NASDAQ Zero Commission
  • DAX Zero Commission
  • Facebook Zero Commission
  • Alphabet Zero Commission
  • Tesla Zero Commission
  • Apple Zero Commission
  • Microsoft Zero Commission

Deposit Method

  • Wire Transfer
  • Credit Cards
  • Bank Account
  • Paypall
  • Skrill
  • Neteller

Rating

What we like

  • Sign up today and get $5 free
  • Fractals Available
  • Paypal Available

Min Deposit

$0

Charge per Trade

$1 to $9 PCM

Rating

Visit Now

Investing in financial markets carries risk, you have the potential to lose your total investment.

Available Assets

  • Total Number of Shares999
  • US Stocks
  • German Stocks
  • UK Stocks
  • European Stocks
  • EFTs
  • IPOs
  • Funds
  • Bonds
  • Options
  • Futures
  • CFDs
  • Crypto

Charge per Trade

  • FTSE 100 $1 - $9 per month
  • NASDAQ $1 - $9 per month
  • DAX $1 - $9 per month
  • Facebook $1 - $9 per month
  • Alphabet $1 - $9 per month
  • Telsa $1 - $9 per month
  • Apple $1 - $9 per month
  • Microsoft $1 - $9 per month

Deposit Method

  • Wire Transfer
  • Credit Cards
  • Bank Account

Roger Baird

Roger Baird

Roger Baird is News Editor at Finixio. He has worked as a financial journalist for 20 years reporting on companies, capital markets and the UK economy.