By David Penn for Finovate
P2P lending pioneer Zopa just picked up $41 million (£32 million) in new funding that will go a long way toward helping the company prepare for the roll-out of its challenger bank later this year. “This investment gives us additional resources to continue our growth, support the launch of our next generation bank, and bring our award-winning products to even more people in the U.K.,” Zopa CEO Jaidev Janardana said. The round was led by Wadhawan Global Capital of India and European venture capital fund, Northzone. Zopa’s total funding stands at more than $111 million.
The investment arrives less than a month after Zopa earned full authorization for P2P lending from the FCA. This authorization was a necessary step for the company to launch its Innovative Finance ISAs, a new investment product with target returns of 6.1% that is scheduled to be available by mid-June. In May, Zopa also previewed Zopa Core, a P2P investment product with target returns of 3.9%. The solution is slated to debut in December and replace some of the company’s other offerings.
One small step toward offering IFISAs is also one giant leap toward Zopa’s goal of building a challenger bank. Last fall Zopa announced plans to launch a challenger bank that would complement the company’s P2P lending business by providing a broader range of financial services products – including FSCS-protected savings accounts and IFISAs. “We believe we are uniquely placed to re-define what people should be able to expect from personal finance products in the 21st century,” Janardana wrote, announcing the news of “next generation bank” at the Zopa blog in November.
Founded in 2007 and headquartered in San Francisco, California, Zopa made its Finovate debut in 2008. Over the past year, the company has enabled more than $1 billion (£800m) in personal loans in the U.K. In January, Zopa became the first P2P lender in Europe to top £2 billion ($2.5 billion) in loans facilitated.