Zopa

Zopa is a UK based peer-to-peer lending company founded in 2004[5] which has a banking licence.[6] It launched in the UK in March 2005.[7] Zopa was the first peer-to-peer lending company.[8]

For other uses, see Zopa (disambiguation).

Zopa Limited
Ltd.
IndustryPeer-to-peer lending
FoundedMarch 2005 (2005-03)[1][2]
FoundersGiles Andrews
James Alexander
Richard Duvall
David Nicholson
Tim Parlett
HeadquartersCottons Centre,
Tooley Street, London
,
England, UK
Key people
Jaidev Janardana(CEO)[3]
ProductsP2P lending[4]
Websitewww.zopa.com

History

Zopa was launched in the UK in March 2005.[9] It was founded in Buckinghamshire in 2004 by a team from the internet banking company Egg Banking.[10][11]

Zopa grew steadily[12] in the years prior to the financial crisis of 2007–2008. It navigated the period with no losses to investors' capital and only a small dip in returns during 2008.[13]

In September 2016, the first portfolio of Zopa loans was securitised on the European markets.[14]

In November 2016, Zopa announced that it would apply for a banking license [15] in order to offer customers a broader set of personal finance products.[16]

In January 2017, Zopa became the first UK based peer-to-peer lending company to lend more than £2 billion worth of loans.[17] Zopa became fully regulated by the Financial Conduct Authority in May 2017.[18][19] Following FCA authorisation, and HMRC approval as an Individual Savings Account (ISA) manager, Zopa started offering its Innovative Finance ISA products in June 2017.[20]

Products and services

Business Model
Peer-to-peer lending

Zopa enables investors to lend to UK consumers directly through its peer-to-peer lending platform.[21]

Borrowers can take out loans between £1,000 and £25,000.[22] Typically individuals use these to funds to help buy a car, consolidate debts, cover home improvements or weddings.[2]

Investors can choose from four investment products[23] based on their risk and return appetite. Investors’ money is split across multiple borrowers.[24] Investors then receive monthly repayments of interest and capital, which they can relend to compound the interest.

Bank launch

In November 2016, Zopa announced its intention to apply for a banking license so it could expand the range of financial products it offers to UK consumers.[25]

Zopa's bank is scheduled to launch in 2019 and will sit alongside its peer-to-peer lending business. Zopa plans to offer FSCS protected deposit accounts, credit cards,[26] and a money management app which makes use of data made available by the introduction of Open Banking.[27] In August 2018, Zopa obtained £44 million in funding for the launch of its new digital challenger bank.[28]

In December 2018 the company was awarded with interim banking licences from UK financial regulators, the FCA and PRA.[6]

In November 2019, it was reported that the company was at risk of losing these permissions and being forced to abandon its banking licence application, due to a lack of capital in the region of £100-150 million.[29]

Corporate identity

Headquarters

The company's main office is currently based at London Bridge[30]

Zopa also has a Development Centre in Barcelona, Spain. The centre has been running since 2017.[31]

Brand

Zopa etymology

Its name stands for "Zone of possible agreement", a negotiating term identifying the bounds within which agreement can be reached between two parties.

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See also

References
  1. Akst, Daniel (5 February 2006). "Where Lender Meets Borrower, Directly" (Business Day). New York, N.Y., United States: New York Times. The New York Times Company. Retrieved 9 March 2017.
  2. Werdigier, Julia (10 December 2012). "RIT Capital to Take Stake in British Financial Start-Up" (DealBook). New York, N.Y., United States: New York Times. The New York Times Company. Retrieved 9 March 2017.
  3. "Zopa CEO Jaidev Janardana: Leading UK P2P Lending with Superior Service, Transparency and Cutting-Edge Fintech", McGill University
  4. Scott, Mark (9 June 2014). "A Lift for One of London's Financial Tech Start-Ups" (DealBook). New York, N.Y., United States: New York Times. The New York Times Company. p. B3. Retrieved 9 March 2017.
  5. Cave, Andrew (5 March 2016). "Zopa aims for enough growth to stop explaining its name". The Telegraph. ISSN 0307-1235. Retrieved 11 April 2018.
  6. "Zopa, the UK P2P lending company, secures bank license". TechCrunch. Retrieved 4 December 2018.
  7. Jones, Rupert (15 February 2014). "The major peer-to-peer lenders". the Guardian. Retrieved 11 April 2018.
  8. "Q&A: Online lending exchange". United Kingdom: BBC. BBC. 7 March 2005. Retrieved 4 July 2016.
  9. Prosser, David. "Happy Birthday Zopa, The Inventor Of P2P". Forbes. Retrieved 11 April 2018.
  10. Evans, Judith (14 August 2015). "My Money — Giles Andrews, Zopa chief". Financial Times. Nikkei. Retrieved 8 March 2017.
  11. "Zopa opera". computing.co.uk. Retrieved 3 October 2015.
  12. "P2P lending: where will the P2P industry go next? - Verdict". www.verdict.co.uk. Retrieved 11 April 2018.
  13. Ficenec, John (26 July 2015). "How safe is peer-to-peer lending?". ISSN 0307-1235. Retrieved 11 April 2018.
  14. Hale, Thomas (26 September 2016). "Debut securitisation for Zopa loans". United Kingdom: Financial Times. Nikkei. Retrieved 10 November 2016.
  15. Hurley, James (17 November 2016). "Peer-to-peer lender Zopa to launch bank" (Business). United Kingdom: The Times. Times Newspapers Limited. Retrieved 8 March 2017.
  16. Dunkley, Emma. "Peer-to-peer lending pioneer seeks banking licence". Financial Times.
  17. "Peer-to-peer lender Zopa passes £2 billion loans milestone". Business Insider. Retrieved 11 April 2018.
  18. Williams, Aime. "Zopa gets FCA approval as peer-to-peer lender". Financial Times. Retrieved 15 May 2017.
  19. Barber, Lynsey (11 May 2017). "Zopa just got full approval as a P2P lender from the FCA". Retrieved 11 April 2018.
  20. Suter, Laura (26 May 2017). "Zopa Isa offering up to 6.1pc finally available". The Telegraph. ISSN 0307-1235. Retrieved 11 April 2018.
  21. Lewis, Martin. "Peer to peer lending: boost savings returns? - MSE". MoneySavingExpert.com. Retrieved 11 April 2018.
  22. "comparethemarket.com - Zopa loans". www.comparethemarket.com. Retrieved 11 April 2018.
  23. Beioley, Kate. "P2P platform Zopa re-opens to new customers". Financial Times.
  24. "Peer-to-peer lending explained - Which?". Which?. Retrieved 11 April 2018.
  25. Editor, James Hurley, Enterprise (17 November 2016). "Peer-to-peer lender Zopa to launch bank". The Times. ISSN 0140-0460. Retrieved 11 April 2018.CS1 maint: extra text: authors list (link)
  26. "Zopa is 'pretty close to finishing' building its new bank". Business Insider. Retrieved 11 April 2018.
  27. "Zopa boss Janardana details plans for customer-centric bank - AltFi Opinion". AltFi. Retrieved 11 April 2018.
  28. "Digital Bank: Zopa Raises £44 Million to Help Fuel Expansion, "Launching Our Bank is a Key Next Step"". Crowdfund Insider. 3 August 2018. Retrieved 7 August 2018.
  29. "Zopa turns to US banking giant for help as peer-to-peer firm looks to raise up to £150m in three weeks - or risk failing in its bid to become a bank". This is Money. 12 November 2019. Retrieved 14 November 2019.
  30. Hurst, Samantha (4 August 2016). "Zopa Relocates: Moves Into New London Bridge Digs". Crowdfund Insider. Crowded Media Group.
  31. "Zopa Establishes Development Center in Barcelona | Crowdfund Insider". Crowdfund Insider. 7 June 2017. Retrieved 15 May 2018.
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