Peer-to-peer lender Zopa has raised £15 million for a hedge fund to fuel expansion and raise awareness of the alternative lending industry.
London-based Zopa, Europe’s largest peer-to-peer lender, has raised the sum from Arrowgrass Capital Partners, a hedge fund manager spun out of Deutsche Bank by traders in 2008.
Zopa lets savers lend out their money to people looking for a low cost loan. To date £455 million has been lent through the platform, with £180 million of that last year alone. The company’s default rate is just 0.2%.
Zopa said it will use the funding for expansion and to raise awareness of the peer-to-peer lending industry among consumers. Co-founder and chief executive Giles Andrews said: “This investment offers the opportunity to spread the benefits of Zopa further and faster”.
As part of the deal Arrowgrass' chief executive Henry Kenner will join the board as a non-executive director.
Zopa, founded in 2005, is one of a growing number of fast growing alternative finance companies challenging the banking industry. Others in the space include Wonga, Kickstarter and FundingCircle.
