Zopa beefs up executive team with two IPO-experienced hires

LONDON – British digital bank Zopa is bolstering its management team with several senior hires as it looks to fuel growth and prepare for an eventual public listing.

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

The firm also hired Kate Erb, a qualified CPA with KPMG and more than 20 years of experience in the financial services sector, as its chief operating officer.

Erb was most recently Director of Operations for the Leeds Building Society.

Donlon in particular oversaw Moonpig’s public listing in 2021, when the company was valued at around £1.2bn. Moonpig is currently trading at £151 per share, with a market capitalization of £518m, reflecting the general decline in technology stocks.

His appointment reflects Zopa’s drive to maturity and user growth with a view to eventual initial public offering (IPO). Zopa had planned to go public last year, but it put that ambition on hold as rising interest rates hammered high-growth tech stocks in the worst turn for the stock market.

Chief Executive Jaidev Janardana insisted the bank has no immediate plans for an IPO, but said a listing could happen by the middle of next year if public market sentiment changes. What needs to change for this to happen, he explained, is the reopening of public markets.

“We haven’t had a great IPO,” he told CNBC on the sidelines of London Tech Week this week. “I’d love to see some successful IPOs actually come.”

“If you look at the types of banks and how they’re valued, or tech companies, they’re not very well valued in the public market.”

“The second thing is…mobility,” he added. “We need to make sure there is enough liquidity for listed companies to actually be listed. Shares should be able to be bought and sold with reasonable ease.”

Zopa will soon reach 1 million customers, a company spokesperson told CNBC. It eventually hopes to reach 5 million users within the next few years. The company competes with big banks and fintechs like Monzo, Revolut and Starling.

Janardana suggested that the company could consider mergers and acquisitions to accelerate growth and expand into other areas of finance, including small business lending and open banking, which allows data to be shared between banks and third-party companies.

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

“We’re open,” he said. “We have the opportunity to use open banking, infrastructure, data, to be able to provide a holistic experience for customers, and that’s something we’ve always been interested in.”

“SME (small and medium enterprise) lending is another thing we are interested in.”

Zopa achieved monthly profitability in April 2022. Zopa aims to be profitable for the full year by the end of 2024.

In terms of products that Janardana is not interested in launching, cryptocurrencies top the list. The financial executive, who has run Zopa since 2014, said cryptocurrencies “are not good for retail consumers today.”

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