Nandini Roy Choudhury, writer
Brief news
- Zopa, a British online lender, expects to double profits and exceed £300 million in revenue in 2023, driven by strong demand for its banking services.
- The company plans to launch a current account product in 2024, enhancing its offerings alongside credit cards and personal loans.
- CEO Jaidev Janardana notes that an IPO is not a priority, despite potential improvements in the market by 2026.
Detailed news
LISBON, Portugal— The CEO of Zopa, a British online lender, stated to CNBC that the company is on course to double profits and increase annual revenue by over a third this year due to the high demand for its banking services.
In 2023, Zopa generated revenues of £222 million ($281.7 million). The company anticipates surpassing the £300 million revenue threshold this year, which would represent a 35% annual increase.
The 2024 estimates are predicated on internal figures that have not been audited.
The company also stated that it is on course to double its pre-tax profits in 2024, following a total of £15.8 million last year.
Zopa, a regulated bank that is supported by the Japanese conglomerate SoftBank, intends to expand its offerings by entering the current account market next year in order to concentrate on the development of new products.
The company currently provides credit cards, personal loans, and savings accounts through a mobile application, which is comparable to other digital banks like Monzo and Revolut, which do not have physical branches.
“The organization is performing exceptionally well.” In an interview with CNBC on Wednesday, CEO Jaidev Janardana stated, “We have either met or surpassed our objectives in all metrics for 2024.”
He stated that the robust performance is a result of the progressive improvement in sentiment in the U.K. economy, where Zopa exclusively operates.
Janardana commented on the macroeconomic conditions in Britain, stating, “Consumers have continued to experience slightly less pain this year than they did last year, despite the challenging circumstances of the past few years.”
He observed that the market remains “tight,” and that fintech offerings like Zopa’s, which typically offer higher savings rates than high-street banks, become “more significant” during such periods.
“The proposition has become more pertinent, and although it is challenging for customers, we have been significantly more restricted in our lending capabilities,” he stated. He also noted that Zopa has managed to expand in spite of this.
Janardana stated that product will be a significant focus for the organization in the future. The company is in the process of creating a current account product that will enable users to more easily manage and spend their money, in a manner similar to that of mainstream banking providers like HSBC and Barclays, as well as fintech upstarts like Monzo.
Janardana stated, “We are of the opinion that the consumer has the potential to acquire additional benefits within the current account space.” “We anticipate that our current account will be made available to the general public at some point in the upcoming year.”
Janardana stated that Zopa’s current account offering will provide consumers with a “slick” experience. This experience will include the capacity to view and administer multiple bank accounts from a single interface, as well as access to competitive savings rates.
The IPO is not a prominent topic of discussion.
Zopa is one of numerous fintech companies that have been identified as potential candidates for an initial public offering. The company announced its intention to go public approximately two years ago. However, it ultimately decided to postpone its plans due to the IPO market’s stagnation in 2022 and the impact of high interest rates on technology equities.
Janardana stated that he does not see a public listing as an imminent priority; however, he does observe indications of a more favorable U.S. IPO market in the upcoming year.
According to Janardana, this should result in a greater willingness of Europe to consider initial public offerings (IPOs) in the latter half of 2026. He did not specify the location at which Zopa would ultimately become public.
Janardana disclosed to CNBC, “To be candid, it is not at the forefront of my thoughts.” “I believe that we are fortunate to have long-term shareholders who are supportive and encourage future growth.”
Zopa appointed Peter Donlon, the former chief technology officer of online card retailer Moonpig, as its own chief technology officer last year. Kate Erb, a chartered accountant from KPMG, was also employed by the organization as its chief operating officer.
In 2021, the company was valued at $1 billion by investors after raising $300 million in a funding round led by Japanese tech investor SoftBank.
Source : CNBC news
