Zopa is a UK based peer-to-peer lending company founded in 2004 which has a banking licence. It launched in the UK in March 2005. Zopa was the first peer-to-peer lending company.
History
Zopa was launched in the UK in March 2005. It was founded in Buckinghamshire in 2004 by a team from the internet banking company Egg Banking. Zopa grew steadily 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. In September 2016, the first portfolio of Zopa loans was securitised on the European markets. In November 2016, Zopa announced that it would apply for a banking license in order to offer customers a broader set of personal finance products. In January 2017, Zopa became the first UK based peer-to-peer lending company to lend more than £2 billion worth of loans. Zopa became fully regulated by the Financial Conduct Authority in May 2017. Following FCA authorisation, and HMRC approval as an Individual Savings Account manager, Zopa started offering its Innovative Finance ISA products in June 2017.
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. Borrowers can take out loans between £1,000 and £25,000. Typically individuals use these to funds to help buy a car, consolidate debts, cover home improvements or weddings. Investors can choose from four investment products based on their risk and return appetite. Investors’ money is split across multiple borrowers. 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. 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, and a money management app which makes use of data made available by the introduction of Open Banking. In August 2018, Zopa obtained £44 million in funding for the launch of its new digital challenger bank. In December 2018 the company was awarded with interim banking licences from UK financial regulators, the FCA and PRA. 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.
Corporate identity
Headquarters
The company's main office is currently based at London Bridge Zopa also has a Development Centre in Barcelona, Spain. The centre has been running since 2017.
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.
