ZOPA has closed a £32m investment round led by Indian financial conglomerate Wadhawan Global Capital (WGC) and European venture capital fund Northzone, following which WGC’s chairman will join the peer-to-peer platform’s board, the firm confirmed on Thursday.
Kapil Wadhawan will join the consumer lender’s management board to help lead its transition towards a double-operation model comprising new banking propositions such as credit, savings and insurance products.
The fresh fundraising batch will be deployed for the platform’s build-out of its future bank infrastructure, as it readies to apply for a bank licence later this year.
Zopa’s plans to become a “next-generation bank”, which first emerged last November, will enable the firm to expand its product range to service UK consumers more thoroughly.
At launch, the P2P heavyweight plans on offering FSCS-protected deposit accounts, a range of P2P investment products including IFISAs, personal loans, car finance, and credit cards for borrowers.
“Zopa’s vision has always been to make money simple and fair for consumers, providing our customers with better value, better service, and greater choice,” said the platform’s chief executive Jaidev Janardana.
“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 UK.”
Wadhawan said WGC is well positioned to assist Zopa’s transition to a broader banking model, as the two firms share the goal of providing better service to consumers with a wider range of products.
“We believe that P2P lending is the business of the future as it provides both lenders and borrowers the platform for mutual financial benefit,” he said.
WGC and Northzone were the two new entries of a group of investors who had already bought equity stakes in Zopa in the past, including Arrowgrass, Augmentum Capital, Bessemer Venture Partners and Runa Capital.
Northzone in particular is known for having supported the early stages of fast-growth tech companies such as Spotify and iZettle.
“We believe Zopa is a blueprint of what the modern, technology-first bank will, and should look like, based on transparency and customer service,” said Jeppe Zink, a partner at Northzone.
“Zopa is already a trailblazer in the market, and is in a strong position to build on this, with the launch of their new products.”
Thursday’s announcements follow a slate of other upgrades the platform revealed last week, including the closure of its provision fund and an overhaul of its offerings ahead of the IFISA launch.
Zopa became the first of the ‘big three’ P2P players to win full authorisation from the Financial Conduct Authority earlier this month.