💰British fintech startup reaches $1bn valuation

FINTECH
British fintech startup reaches $1bn valuation

What’s going on?
Online lending firm Zopa has secured $300m of investment taking its valuation to $1bn, making it the latest British fintech to achieve “unicorn” status.

Why is this important?

Zopa began life as a peer-to-peer lender, connecting investors with borrowers through a single online platform. Since launching in 2005 it’s pivoted toward becoming a fully fledged bank offering savings accounts and credit cards as it takes on traditional high street banks.

So far it’s attracted £700m in deposits and 150,000 credit card customers.

Zopa is one of several British start-ups that have emerged in the past decade disrupting the banking sector. Rivals like Monzo, Revolut and Starling have gained millions of users with fee-free savings accounts and foreign exchange services powered through a mobile app. But profits have been hard to come by for these firms with millions poured into to acquiring customers and building the tech.

Zopa’s latest funding round of $300m was led by SoftBank, the Japanese tech and investment conglomerate. 

The company plans to use the funding to continue expanding the products that it offers to its customers, which will expand on the theme of providing tools to consumers to help them build and manage their savings better.

Takeaway
The huge cash injection puts Zopa on track to list on the public markets by next year so long as it can prove that it can turn a profit in the near future.

RETAIL
Moneysupermarket snaps up Quidco

Price comparison group Moneysupermarket has bought Quidco the cashback site from its founders for £101m. 

Quidco is the second largest cashback provider in the UK, with nearly 1m members and was founded in 2005. 

It offers cashback at about 4,500 sellers, including retailers and travel companies. In the year to July it generated revenue of £59m and profit of £8m.

As well as the price comparison site Moneysupermarket also owns consumer website Money Saving Expert. The company says the deal will broaden its revenue base and aligns with its purpose of saving households money.

Moneysupermarket hopes Quidco will benefit from its data and technology platform and make the cashback site more slick.

Details of the transaction came as the group announced that revenue fell 10% between July and September driven by the turmoil in the energy market.

The steep rise in wholesale gas prices this year and especially in the past month has meant customers are not able to save money by switching energy providers. This channel represents about 15% of the company’s revenue and it says it does not expect switching to return this year.

This has hit the share price which has fallen by over 20% since September. But news of the Quidco takeover sent shares up 8% on the day to 219p.