Zopa, the UK-based neobank, has raised €80 million ($85 million) in equity funding, valuing the company at well over $1 billion. The investment, an upround, comes as the company continues to grow its customer base and expand its product offerings. However, despite its strong financial performance, Zopa's CEO, Jaidev Janardana, has stated that going public is not a priority for the company, citing the current sluggishness of the tech IPO market.

Zopa's latest funding round is a significant milestone for the company, which has been profitable since April 2024. The neobank expects to end the year with 1.4 million customers, £5 billion in deposits, and its profit doubling compared to the previous year. This growth is a testament to Zopa's focus on providing loans, credit cards, and savings accounts to its customers, as well as its commitment to expanding its product offerings.

However, Janardana's comments on the IPO market are a departure from the company's previous statements. In 2021, Zopa announced a $300 million investment, which was described as a "pre-IPO round" ahead of a planned offering at the end of 2022. At the time, Janardana said the company expected to be profitable by the end of 2021. While Zopa did reach its profit milestone, the IPO never materialized, and Janardana has now stated that the company will wait for the markets to revive before considering a public offering.

Zopa's approach to fintech is distinct from many of its peers. Founded in 2005, the company started as a pioneer in the peer-to-peer lending space, providing a platform to match investors with borrowers at competitive rates. In 2020, Zopa obtained a banking license and began offering saving and loan products. Unlike some other neobanks, Zopa has not expanded into cryptocurrency or aggressively pursued international expansion. Instead, the company has focused on developing its products and partnerships, including collaborations with electricity supplier Octopus Energy and retailer John Lewis to offer personal loans.

The lead investor in this round is A.P. Moller Holding, a Danish business giant that owns Maersk and Danske Bank, among other assets. Other investors include existing backers, such as SoftBank, Silverstripe, Northzone, and Uprising. The investment is a vote of confidence in Zopa's business model and its ability to navigate the current market conditions.

Looking ahead, Zopa plans to launch its first current account products in 2025 and expand its use of artificial intelligence (AI) to improve customer interactions. Janardana stated that the company is already using AI internally, and plans to introduce a generative AI platform to help customers manage their finances and purchase Zopa products in a more personalized way. This focus on AI and customer experience is likely to be a key area of growth for the company in the coming year.

In conclusion, Zopa's latest funding round is a significant milestone for the company, and its decision to put IPO plans on hold is a pragmatic response to the current market conditions. As the fintech landscape continues to evolve, Zopa's focus on its core products and partnerships, combined with its commitment to AI and customer experience, positions the company for continued growth and success.