British online lending start-up Zopa has raised $300 million in a funding round led by SoftBank, adding to the soaring investment flowing into Europe’s booming financial technology sector. The company is now valued at $1 billion following the fresh cash injection, according to a source familiar with the deal, making it the latest European fintech to achieve “unicorn” status. The source preferred to remain anonymous as the information has not been disclosed publicly. Founded in 2005, Zopa began life as a peer-to-peer lender, connecting investors with borrowers through a single online platform. The company has since shifted its focus toward becoming a fully-fledged bank, after securing a banking license in the U.K., but still operates its peer-to-peer marketplace. Zopa launched a credit card and savings account last year, hoping to capture a larger share of the British retail banking market and take on giants like Barclays and HSBC. It’s so far netted £700 million ($961 million) in deposits and attracted 150,000 credit card customers.
Zopa is one of several start-ups seeking to disrupt the banking sector. So-called neobanks like Monzo, Revolut and Starling have emerged in the last decade, luring millions of customers with fee-free checking accounts and a slick online interface. But so far, they have struggled to make a profit. Starling tipped into the black for the first-time last year, and says it is on track to post its first annual profit. Revolut racked up £167.8 million ($230.6 million) in losses in 2020, while Monzo lost £130 million. Revolut did however manage to break even toward the end of last year. Zopa is one of the few fintech’s in the social lending space that still runs a peer-to-peer marketplace. Domestic rival RateSetter closed its P2P business following a sale to British lender Metro Bank, while U.S. firm LendingClub did the same after acquiring a regulated bank.