By Pablo Mayo Cerqueiro and Iain Withers
LONDON – Zopa, the British peer-to-peer lender turned digital bank, has raised 75 million pounds ($92.40 million) from some of its shareholders, as plans for an initial public offering (IPO) have been put on hold, Chief Executive Jaidev Janardana told Reuters.
IAG Silverstripe – which in 2019 provided an eleventh-hour injection for Zopa to secure its banking licence – led the equity round, with participation from U.S. hedge fund Davidson Kempner and venture capitalist Augmentum, Janardana said.
Fellow shareholder SoftBank did not take part in the latest cash call, he added. The Japanese conglomerate previously led a 220 million pound funding round in late 2021 that valued Zopa at roughly $1 billion.
SoftBank’s flagship Vision Fund, a major technology investor, posted a $23 billion loss last August following a slump in sector valuations that forced it to mark down its investments.
SoftBank was not immediately available for comment.
Zopa did not disclose a price tag for the funding round but said it “cements” its unicorn status, awarded to start-ups worth upwards of $1 billion. A source close to the deal said Zopa’s post-money valuation increased through the round.
London-based Zopa started out as a peer-to-peer lender in 2005 and later moved to banking, amassing 2 billion pounds of consumer loans and more than 3 billion pounds of customer savings.
Britain’s economic downturn means Zopa is likely to post another annual loss for 2022 in forthcoming annual accounts, Janardana said, due to expected provisions for potential loan losses. The company had been profitable on a monthly basis several times last year, he said.
Janardana said the company, which previously targeted a stock market listing by 2022, was more likely to float next year unless market conditions were to improve significantly in the coming months.
In the meantime, Zopa will use the fresh cash to explore potential acquisitions, including of companies of similar size, Janardana said. The bank could raise further cash or offer its own shares to help fund larger buys, he added.
The company is also considering raising 25 million pounds to 100 million pounds of Tier-2 debt later in the year to firm up its balance sheet, Janardana said, adding that the plans are contingent on the cost of debt.
($1 = 0.8117 pounds)