Zopa bank hits profitability but may push back IPO amid market turbulence
Digital lender Zopa announced it hit profitability for the first time ever last year but warned the firm may be forced to push its IPO into next year, amid major market turbulence brought on by the shocks of war in Ukraine and soaring inflation.
Softbank-backed Zopa, which closed a $300m funding round in October last year, had previously set out consistent profitability as one of the benchmarks needed for floating on the public markets but market turbulence made it a difficult time to mull floating the firm.
“There are very few IPOs happening and the IPO market’s largely shut for companies – for companies outside probably commodities right now,” he told Morning Wire
But he said the firm was in “no rush” to list.
“Despite some very strong growth, we are well capitalised way into next year. We have supportive investors,” he said. “So we’re not in a rush – we want to make sure that we pick the right moment.”
The firm has said previously it is heading for a London listing due to an investor base that focuses on “a combination of profitability, strong unit economics and growth.”
It came as Janardana hailed 2021 a bumper year for the firm as it hit profitability for the first time.
“ The past year has been a highly successful one for Zopa bank as we’ve exceeded our targets across new and existing products and raised $300 million led by Softbank to fuel our accelerated growth,” he said.
Zopa, which was launched in 2005 as a peer-to-peer lender, earned a full banking licence in June 2020 and closed the peer-to-peer side of its business in December 2021.
Janardana said hitting profitability 21 months after winning the licence was down to the firm’s “unique model”.
“Today’s news makes Zopa one of the fastest digital banks to achieve profitability ever and reinforces our thesis on the importance of sustainable growth as a catalyst for accelerated product and market expansion,” he said.
Zopa also now has its eye on a buy-now pay-later product this year.