Latest news with #Zopa
Forbes
19-05-2025
- Business
- Forbes
Here's Where Fintechs Are Turning For Funding
As the fintech VC funding landscape continues to look uncertain amid wider economic turmoil, companies are turning to alternatives to secure the capital they need. Those include crowdfunding, which might be about to enjoy a resurgence, as well as lesser known sources of capital such as government funded equity investment. Despite some positive signs of recovery in the fintech funding market, with global investment in H2 2024 exceeding that in H1, VC funding still trails far behind its peak from 2021. In fact, it has yet to reach the same levels seen in 2018. And where funding has been deployed, it has tended to be at the polar opposite ends of company stage, into either very early startups, or late, well-established, profitable companies. In many cases, the latter are raising funds from private investors rather than attempting an IPO, as might have been expected a few years ago, because of the volatile environment. UK-headquartered digital bank Zopa, for example, recently raised £80 million from existing and new investors, while having said in April that an IPO is 'not a priority' and that it might be reconsidered 'if and when the markets change'. This trend for fintechs to stay private for longer, gives VCs an opportunity to make lower risk bets when deploying their dry powder. In turn making it even harder for scaling stage companies to raise and, as a result, they are looking elsewhere. Jaidev Janardana, chief executive officer Zopa Ltd., speaks at the IFGS 2023 summit at the Guildhall ... More in London, UK, on Monday, April 17, 2023. Photographer: Chris Ratcliffe/Bloomberg In 2021 the number and value of UK crowdfunding deals was soaring, however since then it has declined dramatically from 569 rounds at its peak, to 297 in 2024. Now, that picture might be about to change again, as fintechs rediscover the funding method. One such fintech is Bloom Money, a UK-based community finance company. Founder and CEO, Nina Mohanty, observed that crowdfunding was becoming particularly popular with consumer-facing fintechs as a response to VCs turning away from the segment. Of the company's own reasons for going down the crowdfunding route she said, 'We're really excited about launching our crowdfund, which is currently in early access, because we get to showcase the power of our community, and the people that actually use our product and want to invest in a more inclusive financial future. By launching a crowdfund and building the future of Bloom with our community we are excited to demonstrate to VCs that there is indeed a need and huge pool for what we are building.' Another fintech that used this option, is Zero, a UK-based environmentally sustainable alternative to banks, that raised around £400,000 of its latest £1.5 million round through crowdfunding. Meanwhile, Sibstar, a spend management app for vulnerable people, is looking to raise £250,000 through the mechanism. Both are consumer-facing fintechs, supporting Mohanty's observation. Fintechs in some areas can also access government funding, usually distributed through a development bank, as is the case in Canada and Wales. These institutions vary in how they operate, but in the two examples given, they provide a range of finance solutions directly to companies. That includes equity investment, in which case, the bank sits on a company's cap table like any other investor. The caveat is that the companies must typically have a significant physical presence in the country in question in order to access the finance. Two fintech companies that have recently raised from the Development Bank of Wales include Driverly, a platform offering adaptable apps to insurers, and Finalrentals, a car hire platform. Armin Kia, CEO of Driverly, said of the company's reasons for applying for funding from the bank, 'We've always been keen to keep a fine balance between keeping a focus on our core business, while also being prepared to react to the demands of the market. That's an important task for any leadership team. The Development Bank of Wales and our new investors can see the wider market and help us with that.' Meanwhile in Canada, the BDC has participated twice in funding rounds for financial services app Koho, most recently in 2024. Additionally, in February 2025, the BDC announced a $500 million commitment to its Growth Venture Fund which includes insurtech and fintech in its focus areas, highlighting its commitment to the sector. The funding sources listed here are just two of the options available to fintechs that aren't private VC capital. The VC market, which fuelled the growth of the fintech industry for so long, will be some time yet in fully recovering. In the meantime, entrepreneurs and founders are known to be a creative lot, and as such, we will see an increase in uptake from more alternative sources of financing as they seek the capital they need to scale their companies.
Yahoo
16-05-2025
- Business
- Yahoo
UK neobank Zopa secures $106m in AT1 capital
Zopa, a UK-based digital bank, has secured £80m ($106.4m) in Additional Tier 1 (AT1) capital from both current and new investors. It follows an £80m ($106.4m) equity fundraising in November 2024. The bond issuance took place on the International Securities Market (ISM) of the London Stock Exchange (LSE). Jefferies was the structuring adviser and sole lead manager for the transaction that was oversubscribed by more than two times, with over 20 investors taking part. The funds will be utilised to enhance Zopa's balance sheet while avoiding shareholder dilution as the company prepares to launch its flagship bank account. The new bank account aims to offer competitive value and convenience to customers, addressing a broader range of financial needs. Zopa's pre-tax profits doubled to £34.2m ($45.4m) for the financial year ending 31 December 2024, alongside a 30.2% increase in revenue. In addition, Zopa has formed partnerships with major entities such as Octopus Energy to enter the UK's £23bn ($30.5bn) renewable energy sector and John Lewis to provide personal loans to its 23 million customers. Zopa will integrate its digital-first personal loan product into the John Lewis Money website, providing the retailer's customers with straightforward and transparent financing options. Since its bank launch in 2020, Zopa has attracted £5.5bn ($7.31bn) in deposits and currently holds over £3bn ($3.9bn) in loans on its balance sheet. The company employs nearly 850 staff and plans to expand its office space with a move to Canary Wharf. "UK neobank Zopa secures $106m in AT1 capital" was originally created and published by Retail Banker International, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
Times
12-05-2025
- Business
- Times
‘In the UK there's a lot of growth to be had, a lot of opportunity'
The government gathered leading fintech entrepreneurs to kick off UK fintech week in London this week and was met with a resounding thumbs up. Jaidev Janardana, co-founder and chief executive of the neobank Zopa was among those providing an upbeat assessment of the industry's prospects. Last week, it said it doubled pre-tax profits to £34.2 million in 2024 and grew its customer base to 1.4 million people. 'In the UK there's a lot of growth to be had, a lot of opportunity from sectors, such as fintech, to grow. I'm really encouraged by what the government is doing here to make sure we continue to remove barriers to growth,' he told the audience from financial services firms and government agencies. Richard Davies, chief executive of
CNBC
30-04-2025
- Business
- CNBC
Britain at risk of losing ground to rival fintech and crypto hubs, execs warn
LONDON — Britain is at risk of losing budding fintech and cryptocurrency entrepreneurs to rival hubs if it doesn't address pressing regulation and funding challenges, according to industry leaders. Several crypto bosses told CNBC this week that the U.K. has created an unfavorable environment for fintech and crypto. They argued that the local regulator takes too strict an approach to registering new firms, and that pension funds managing trillions of pounds are too risk-averse Whereas a decade ago the U.K. was seen as being at "the forefront in terms of promoting competitiveness and innovation," today things "have shifted more towards prioritizing safety and soundness to an extent where growth has been held behind," according to Jaidev Janardana, CEO of British digital bank Zopa. "If I look at the speed of innovation, I do feel that the U.S. is ahead — although they have their own challenges. But look at Singapore, Hong Kong — again, you see much more rapid innovation," Janardana told CNBC. "I think we are still ahead of the EU, but we can't remain complacent with that." Tim Levene, CEO of venture capital firm Augmentum Fintech, said entrepreneurs face challenges attracting funding in the U.K. and could be tempted to start their founding journeys in other regions, like Asia and the Middle East. "We're scrambling around looking for pots of capital in the U.K., where currently it would be more fruitful to go to the Gulf, to go to the U.S., to go to Australia, or elsewhere in Asia, and that that doesn't feel right," Levene told CNBC. Lisa Jacobs, CEO of business lending platform Funding Circle, said that the negative impacts of Brexit are still being felt by the U.K. fintech industry — particularly when it comes to attracting overseas talent. "I think it is right that we're paranoid about other locations," she told CNBC. "It is right that we are trying to — as an industry, as government — make the U.K. still that great place to set up. We have all the ingredients there, because we've got the ecosystem, we do have this talent setting up new businesses. But it needs to continue. We can't rest on our laurels." The U.K. is home to a vibrant financial technology sector, with firms like Monzo and Revolut among those scaling to become challengers to traditional banks. Industry insiders attribute their rapid rise in part to innovation-friendly rules that allowed tech startups to apply for — and secure — licenses to offer banking and electronic money services with greater ease. Businesses operating in the world of crypto are frustrated that the same hasn't happened yet for their industry. "Other jurisdictions have started to seize the opportunity," Cassie Craddock, U.K. and Europe managing director at blockchain firm Ripple, told CNBC. The U.S., for example, has adopted a more pro-crypto stance under President Donald Trump, with the Securities and Exchange Commission dropping several high-profile legal cases against major crypto businesses. The EU, meanwhile, has led the way when it comes to laying out clear rules for the industry with its Markets in Crypto-Assets (MiCA) regulation. "The U.S. is driving global tailwinds for the industry," Craddock said, adding: "MiCA came into force in the EU at the end of last year, while Singapore, Hong Kong and the UAE are moving full steam ahead with pro-industry reforms," she added. The U.K. on Tuesday laid out draft proposals for regulating crypto firms — however, industry insiders say the devil will be in the detail when it comes to addressing more complex technical issues, such as reserve requirements for stablecoins. One area in particular where fintech and crypto leaders alike want to see more clarity is stablecoins, a type of cryptocurrency whose value is pegged to that of a sovereign currency. Mark Fairless, CEO of payments infrastructure firm ClearBank, told CNBC that his business has been looking to develop its own stablecoin — but it's been held back from launching one because of a lack of regulatory clarity. Stablecoins are "part of our medium-term, longer-term strategy," Fairless told CNBC. "We see ourselves well set up for that." However, he added that a ClearBank stablecoin will only be possible when there's regulatory certainty in the U.K. The startup is awaiting approval from the Bank of England. Crypto industry insiders also say the FCA has been too restrictive when it comes to approving registrations from digital asset firms. The FCA is the regulator responsible for registering firms that want to provide crypto services within the scope of money laundering regulations in the U.K. Last year, the watchdog published a roadmap detailing its plan to implement crypto regulation. The roadmap includes a series of discussion papers on topics ranging from stablecoins to crypto lending over the next two years. A full regulatory regime is expected to go live by 2026. Another issue faced by crypto companies is that of being "debanked" by high street banks, according to Keith Grose, head of U.K. at Coinbase. "Debanking is a huge issue — you can't get bank accounts if you're a company or individual who works in crypto," Keith Grose, Coinbase's U.K. head, told CNBC. "You can't build the future of the financial system here if we don't have that level playing field." A survey by Startup Coalition, Global Digital Finance and the U.K. Cryptoasset Business Council of more than 80 crypto firms published in January found that half were denied bank accounts or had existing ones closed by major banks. "I think the U.K. will get it right — but there is a risk if you get it wrong that you drive innovation to other markets," Coinbase's Grose told CNBC. "This is such a fast developing space — stablecoins grew 300% last year. They're already doing more volume than Visa and Mastercard," he added. "I think if you deliver smart regulation here, stablecoins can be a foundational part of our payment ecosystem in the U.K. going forward."
CNBC
29-04-2025
- Business
- CNBC
Zopa CEO: Fintechs face challenges when it comes to scaling in the UK
Jaidev Janardana, CEO of British digital bank Zopa, discusses the firm's 2024 annual results, future product plans, and the regulatory landscape for fintech in the U.K.
