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Zopa nears London IPO, targets BNPL market

written by Bella Palmer
zopa

The peer-to-peer lender has revealed it is planning to list in London next year or in early 2023

Zopa is nearing a public listing in London and has identified buy-now-pay-later (BNPL) as its next market.

It is the world’s oldest peer-to-peer lender, which has also launched a banking brand.

Zopa has revealed it is planning to list in London next year or in early 2023.

Zopa group chief executive Jaidev Janardana said in an interview with The Daily Telegraph that he wasn’t worried about the recent stock market debut of tech firm Deliveroo, which saw its share price crash by 25 per cent.

Deliveroo’s share price crashed over 25pc in London debut, wiping £2bn off its valuation.

We think the London market is a good market, it’s a deep market, Janardana said. We are a UK focused company and so that’s going to be the most likely location.

Zopa is also reported to be planning to take on BNPL giants such as Klarna.

The use of BNPL products nearly quadrupled in 2020 and is now at £2.7bn, with 5m people using these products since the beginning of the coronavirus pandemic, according to a review by the Financial Conduct Authority (FCA).

The City watchdog is planning to regulate the sector after its research found significant potential for consumer harm.

BNPL companies earn from interest charged if borrowers miss a payment.

The FCA found that more than one in 10 customers of a major bank using BNPL was already in arrears.

Janardana said Zopa would focus on bigger and larger items where we genuinely think taking finance makes sense.

There has long been speculation around a possible Zopa flotation. A Sky News report in 2018 suggested that Zopa was looking to raise money ahead of a stock market listing.

Janardana also said in the Bloomberg interview that the firm was considering going public in early 2021 but this didn’t materialise amid the pandemic.

Once listed, Zopa would join rival P2P lender Funding Circle on the London Stock Exchange. Funding Circle listed in 2018 with a price of 440p but is now trading at around 154p.

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