One of Britain’s largest peer-to-peer lenders, Zopa, said on Thursday it had raised 60 million pounds ($79 million) from investors, its biggest funding round so far and the last before it becomes a fully fledged bank.
Zopa, which helped pioneer peer-to-peer lending in Britain, said in August the funding call, its eighth so far, had raised 44 million pounds. Since then, it has attracted an additional 16 million pounds in investment and the fundraising has now closed.
“This new funding takes us a step closer to realizing our vision of being the best place for money in the UK,” said Chief Executive Jaidev Janardana.
Since starting out in 2005, Zopa has lent more than 3.7 billion pounds in unsecured personal loans to customers, and in 2016 applied for a banking license to allow it to take deposits as a more stable source of funding.
The latest funds, from both new and existing investors, will be used to launch its bank, which will sit alongside its peer-to-peer business, and expand its product offering to include savings accounts and overdraft alternatives. That will put Zopa in competition with Britain’s big four lenders and a host of smaller rivals, as well as fellow peer-to-peer firms such as the recently-listed Funding Circle (FCH.L) and RateSetter.
Zopa’s move into banking comes as the peer-to-peer industry, which capitalized on the gap left by big banks as they pulled back from lending following the financial crisis, faces the prospect of stricter regulation and still encounters suspicion from some investors.
The model remains largely untested in an economic downturn and a number of scandals both in Britain and abroad have caught regulators’ attention and left many dubious about the industry.
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Funding Circle’s October listing on the London Stock Exchange raised less than initially anticipated, and saw the stock lose more than a quarter of its value in the weeks after. It is currently trading about 14 percent below the IPO price.
Unlike Funding Circle, Zopa has already turned a profit, making 1.5 million pounds in 2017. That compared with a loss of 5.8 million pounds a year earlier.
It said it planned to launch its bank soon.