LONDON (AP) — Zopa, a British digital bank, is beefing up its management team with a handful of senior recruits as it aims to accelerate development and prepare for an eventual public offering.
The SoftBank-backed firm, which provides credit cards, personal loans, and savings accounts, has engaged Peter Donlon, the former chief technology officer of online card retailer Moonpig, as its CTO.
Kate Erb, a trained chartered accountant from KPMG with over 20 years of expertise in financial services, has also joined the business as chief operational officer.
Erb most recently worked as the operations director at Leeds Building Society.
Donlon was instrumental in Moonpig’s public offering in 2021, which valued the firm at roughly £1.2 billion at the time. Moonpig is presently trading at £151 a share, for a market capitalization of £518 million, reflecting a general decline in technology stocks.
His hiring underlines Zopa’s effort to mature and ramp up user growth in preparation for a future initial public offering (IPO). Zopa had intended to go public last year, but the stock market took a turn for the worst, with increasing interest rates hammering high-growth tech businesses.
CEO Jaidev Janardana said the bank has no intentions for an IPO in the near future, but he hinted a listing may be on the horizon by mid-next year if the public market attitude changes.
What must alter for that to happen, he continued, is the reopening of public markets.
“We haven’t had great IPOs,” he told CNBC this week on the margins of London Tech Week. “I’d love to see some successful initial public offerings.”
“If you look at how banks are valued, or how tech companies are valued, public market valuations are not great.”
“The second thing is… liquidity,” he continues. “We must ensure that there is sufficient liquidity for a public company to be truly public.” “Shares should be reasonably easy to buy and sell.”
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According to a corporate representative, Zopa will shortly exceed 1 million customers. It hopes to reach 5 million users in the following years. The company competes with both major banks and fintech such as Monzo, Revolut, and Starling.
Janardana advised that the company consider expanding its business through mergers and acquisitions, as well as a move into other sectors of finance such as small business loans and open banking, which allows banks and third-party organizations to share data.
Earlier this year, Zopa secured £75 million ($95.9 million) from investors.
“We’re open,” he said. “Wherever there is an opportunity for us to use open banking, infrastructure, and data to provide holistic experiences to customers, we are interested.”
“Another area of interest for us is SME (small and medium-sized enterprise) lending.”
In April 2022, Zopa achieved monthly profitability. By the end of 2023, Zopa hopes to be profitable for the entire year.
Crypto is at the top of the list of things that Janardana is not interested in releasing. According to the finance executive, who has led Zopa since 2014, cryptocurrency “is not great for the retail consumer today.”
“I’m not a big fan of cryptocurrency yet, and I’m not convinced,” he remarked. “It’s a complicated product that most people don’t understand, which is why we never offered it.”