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P2P lender Zopa finalises £130m capital injection agreement

Zopa is said to be in advanced talks to agree a £130 million capital injection from an entity linked to US private investment firm IAG Capital, helping the peer-to-peer lender meet regulatory capital requirements.

Jaidev Janardana, Zopa CEO

Jaidev Janardana, Zopa CEO

Sky News reported that the agreement, which is with an entity connected to IAG Capital Partners and Silverstripe, its UK vehicle, was finalised this weekend, and is expected to be signed early this week.

This comes just days before Zopa’s race against time to raise £150 million before its Authorisation with Restriction banking licence runs out. The license was granted by the Financial Conduct Authority on 4 December 2018, and the company was given 12 months to meet the capital requirements.

When the license was granted, Zopa became the world’s first combined peer-to-peer lender and digital bank.

According to Sky News’ sources, the funding has been negotiated at a steep discount when compared to Zopa’s 2018 capital-raising while the cash injection means IAG Capital will hold a majority stake in the FinTech.

Last week, The Times reported that Zopa backer Agumentum Fintech had delayed its result due to uncertainty about the value of its stake in the company, with results to be published once there is “greater clarity over the valuation of the company’s holding in Zopa.”

In October, Zopa announced the launch of AI-based tool Borrowing Power, which it would use to assess the creditworthiness of customers in order to allow customers to borrow at the best possible rate.

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