Online peer-to-peer lender Zopa has raised fresh cash in preparation for the launch of its own challenger bank.
The £32m comes from Wadhawan Global Capital, an Indian financial services firm and Northzone, the venture capital firm which has previously backed Spotify, iZettle and MarketInvoice, among others.
Read more: Zopa just got full approval as a P2P lender from the FCA
Zopa announced last year that it was applying for a banking licence from financial regulators and plans to launch its own banking services, joining the ever growing number of fintech challengers taking on traditional banks.
“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 Zopa chief 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.”
Zopa was one of the UK’s first online peer-to-peer (p2p) lenders, launching in 2005, and sailed past the £2bn loan value mark at the start of the year, with £800m of that in the past 12 months alone.
The startup plans to offer a deposit account, personal loans, car financing credit cards and loans, alongside p2p investment products such as the Innovative Finance Isa (IFISA). It last month received approval as an authorised p2p lender under new Financial Conduct Authority rules for the sector paving the way for the IFSA.
Read more: Northzone raises €300m fund and is eyeing London fintech startups
The latest investment brings total funding to £87m from the likes of Balderton, Benchmark and Augmentum Capital.
Northzone last year said it was eyeing UK fintech startups when it announced a new $300m fund. Partner at the firm Jeppe Zink said of the Zopa investment: “We believe Zopa is a blueprint of what the modern, technology-first bank will, and should look like, based on transparency and customer service. 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.”