Zopa, the oldest of P2P lending sites, certainly in the UK, has announced that it’s raised a new “multi-million pound” round led by Augmentum Capital, the VC fund backed by RIT Capital. That the company isn’t being more specific with the figure, however, suggests that it may not have reached the heights of its previous C Round, which CrunchBase pegs at $12.9m. It also comes at a time when the UK government appears to be taking an interest in the P2P lending sector, with regulation under serious consideration.
Prior to today’s investment, which also included participation from Forward Venture Partners as well as previous backers Bessemer Venture Partners and Wellington Partners, Zopa had raised a total of $33.9 million since it was founded in early 2005. The new injection of capital is said to be used to accelerate growth and consolidate its leading position in the UK.
Like other P2P lending sites and marketplaces, Zopa connects borrowers and savers, to offer better rates than high street banks for both parties. To date, the company says that over £250 million has been lent through its platform, making it the UK market leader. It also notes that in the current economic climate where the banks are in paralysis, P2P lending is seeing renewed interest as punters look for alternative ways to borrow and invest money.
Augmentum Capital appears to be good fit for Zopa — or so the PR would have us believe. The fund has already invested in other alternative finance companies, Borro and BullionVault, making it “the go-to fund for online alternative finance players”, says Tim Levene, Managing Partner, Augmentum Capital, in a nicely canned statement. Levene himself is the ex-Commercial Director of Betfair, so there’s a P2P connection there, too.
Zopa is also keen to flag up a recent UK government announcement that £100 million of its tax-payer funded Business Finance Partnership fund will be distributed in part through alternative finance platforms.
Meanwhile, regulation of the P2P lending industry could be on the cards, something that competitor RateSetter thinks will give the sector a shot in the arm. What’s that, a startup calling for government red tape, I hear you say? Apparently so.