(Bloomberg) -- Digital bank Zopa Bank Ltd. has raised €82 million ($86.6 million) as it prepares to launch current accounts in the new year.
The funding round was led by Maersk shipping owner A.P. Moller Holding A/S and included existing investors IAG Silverstripe, Augmentum Fintech, JNE Partners LLP, and Davidson Kempner Capital Management LP. Zopa did not disclose its valuation, but said it retained its $1 billion unicorn status.
“This capital allows us to maintain the growth trajectory that we have been on,” Chief Executive Officer Jaidev Janardana said in an interview with Bloomberg News.
Janardana added the firm expects to double annual profits this year to £32 million and increase revenues to £300 million, citing unaudited figures for the year through December.
The fintech, which is also backed by SoftBank, provides personal loans, car financing, and savings accounts to 1.3 million UK customers. It’s testing current accounts to around 10,000 customers ahead of its wider launch in 2025.
Though Zopa was expected to go public in recent years, listing is “not a top priority” for the company, the CEO said, as the firm focuses on new products and developments in generative AI.
“What I hear is that it’s likely, very likely, that the US IPO market gets more open and a bit more liquid over next year, and which hopefully leads to European markets get into a similar place the year after,” Janardana said.
The firm, which lent £282 million in car finance in 2023, says it was minimally impacted by the auto loans saga and temporary paused lending following a landmark court ruling in October.
“Having more clarity in the regulation such that the courts can also remain consistent with that is I think the direction of travel we will have to go in,” Janardana said.
This year the firm has broadened its lending even further after partnering with Octopus Energy to offer buy now, pay later on solar panels and with the retailer John Lewis to offer personal loans.
In a separate Bloomberg TV interview, Janardana said Zopa should reach 1.8 million customers, potentially crossing 2 million, by the end of next year.
As the number and scale of neobanks grows, he believes there is room for consolidation. “A lot of us have built slightly complementary product sets,” he said. “If we really have to take on the incumbents and really make banking better, and make the banking sector more efficient, I think some of us joining forces can be for the better.”
--With assistance from Tom Mackenzie.
(Updates with CEO comments on Bloomberg TV from eleventh paragraph.)
©2024 Bloomberg L.P.