Zopa beefs up executive team with two IPO-experienced hires

LONDON — British digital bank Zopa is strengthening its management team with two senior staff, as the company looks to boost growth and prepare its business for eventual public listing.

the SoftbankThe backed company, which offers credit cards, personal loans and savings accounts, told CNBC exclusively that it has hired Peter Donlon, former chief technology officer of online card retailer Moonpig, as its CTO.

The company also brought on Kate Earp, a KPMG-qualified chartered accountant with more than 20 years experience in the financial services industry, as its Chief Operating Officer.

Earp was most recently Director of Operations at Leeds Building Society.

Donlon in particular watched Moonpig with its public listing in 2021, which valued the company at around £1.2bn at the time. Moonpig now trades at £151 a share, giving it a market capitalization of £518m, reflecting a broad decline in technology stocks.

His appointment reflects a push by Zopa to mature and ramp up user growth in anticipation of an eventual initial public offering (IPO). Zopa planned to go public last year, but put that ambition on ice as the stock market took a turn for the worse as rising interest rates dampened high-growth tech stocks.

CEO Jaidev Janardana insisted the bank had no plans to go public in the near term, but indicated that a flotation could be on the horizon by the middle of next year if sentiment in the public markets changes.

What needs to change for that to happen, he said, is for public markets to open back up.

“We haven’t had big IPOs,” he told CNBC in an interview on the sidelines of London Tech Week this week. “I’d like to see some really successful IPOs coming.”

“If you look at kind of banks, how they’re valued, or tech companies, both, the overall market valuations aren’t great.”

The second thing is… fluidity. he added. “We need to make sure that there is enough liquidity for a public company to be truly public. The shares need to be able to be bought and sold reasonably easily.”

A company spokesperson told CNBC that Zopa will soon reach 1 million customers. It eventually wants to reach 5 million users in the coming years. The company competes with big banks as well as fintech companies such as Monzo, Revolut, and Starling.

Janardana suggested the company could look to ramp up its business growth through mergers and acquisitions, and move into other areas of finance including small business loans and open banking, which allows data to be shared between banks and third-party companies.

Zopa raised 75 million pounds ($95.9 million) from investors earlier this year.

He said, “We are open.” “When there is an opportunity for us to use open banking, infrastructure, and data, to be able to deliver holistic customer experiences, that’s something we’re excited about.”

“Lending to small and medium enterprises (SMEs) is another thing that interests us.”

Zopa achieved profitability on a monthly basis in April 2022. Zopa aims to achieve profitability for the full year by the end of 2023.

In terms of products Janardana has no interest in rolling out, crypto tops the list. The CFO, who has led Zopa since 2014, said that cryptocurrency is “not great for today’s retail consumer.”

“I’m not a big fan of cryptocurrency yet, I’m not convinced,” he said. “It’s a complex product that people don’t understand, and that’s why we never introduced it.”