Zopa Bank, two years on



It has officially been two years since Zopa Bank was founded, and a lot has changed since then.

When the bank was launched in June 2020, Zopa was still the UK’s largest peer-to-peer lending platform, with a loan book valued at approximately £5bn.

The world was also in the early grips of the Covid-19 pandemic, which shuttered many businesses and led to Zopa’s decision to pause all retail lending until further notice. It would never return to P2P lending.

Instead, the past two years have seen a remarkable evolution for the world’s first P2P lender. Here are some of the highlights…

15 years after launching its P2P business, Zopa announced that it had received its full UK bank license, paving the way for the official launch of the company’s new digital bank later this year.

The company had been awarded a bank licence with restrictions in December 2018, and went on to raise £140m to enable its banking entity to fulfil its regulatory capital requirements.

Zopa Bank confirmed a $300m (£220m) fundraise led by Softbank, as part of its plans to go public. It was described as a pre-initial public offering (IPO) funding round that will boost its balance sheet and help it meet capital requirements.

In the first indication that Zopa was moving away from its P2P roots, the firm revealed in its 2020 annual accounts that the board was considering the “strategic direction” of the platform as it said future growth will be driven by balance sheet lending.

Zopa wrote to all investors to say that it would be closing its P2P business, and all investment funds will be returned to holding accounts by 31 January 2022.

Just 18 months after launching its bank, Zopa announced that more than £1bn had been deposited in its flagship fixed term savings account. The bank also announced that it had more than £1bn of loans on its balance sheet, and had issued more than 200,000 credit cards, making it a top five credit card issuer in the UK.

By 31 January 2022, all money had been returned to Zopa’s P2P lenders.

The Zopa Group finally reached profitability, 17 years after the company was founded and just four months after shuttering its P2P lending business. The digital bank said that it is likely to remain profitable from this point onwards, and expects to close 2022 with a balance sheet of £2bn.

Zopa Bank launched a new hybrid savings account for younger users, which allows funds to be held in multiple savings pots at the same time.

Within just 65 days of its launch, Zopa announced that its hybrid savings product had passed £100m in deposits.

Eight months after completing a $300m pre-IPO funding round, Zopa was reported to be delaying its stock market floatation due to market conditions.

Natasha Wear, Zopa’s former chief executive of P2P lending, is officially moved into a new role focusing on the customer experience at Zopa Bank.

“This represents a natural next step for Tash in the business following the decision to close our retail P2P business,” a Zopa spokesperson told Peer2Peer Finance News.

  • June 2022 – Zopa Bank celebrates its two-year anniversary

“Its been two years since we gained our full UK bank license,” a Zopa spokesperson said, in a post on LinkedIn. “We want to say a big thank you to all our fantastic customers, new and old. What a great journey its been so far.

“Here’s to many more years together!”

Read more: Zopa introduces fully-regulated BNPL products