Zopa nears £130M injection for challenger bank

via PitchBook

IAG Capital Partners and its UK-based investment vehicle Silverstripe are set to invest £130 million in peer-to-peer lender Zopa, per Sky News. The funds would reportedly come just days before Zopa’s conditional banking license expires and would enable the British company to fulfill its regulatory capital requirements, proving that it is financially strong enough to become a bank.

Founded in 2005, Zopa is said to have issued around £5 billion in loans and have 500 employees. Last year, the company received £60 million to launch its digital challenger bank. IAG is reportedly already a small shareholder in the business and, if the deal is successful, will hold a majority stake in Zopa. Other backers include Northzone, Benchmark, Bessemer Venture Partners and Augmentum Capital.

Zopa’s move into online banking comes as the P2P industry faces increasing pressure from the UK’s Financial Conduct Authority. The regulator is introducing new restrictions for companies in the sector, including a limit on investments in P2P agreements for retail customers. The industry has seen several collapses this year, including property lender Lendy and pawnbroker FundingSecure.

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