Indian finance giant Wadhawan takes stake in UK fintech firm Zopa
Wadhawan Group is buying a stake in one of the pioneers of the UK's fintech sector, Sky News can reveal.
By Mark Kleinman, City Editor
The British peer-to-peer lender Zopa has enlisted financial backing from a major Indian finance group as it plots a move into mainstream consumer banking.
Sky News has learnt that Zopa, which launched in 2005, has attracted a big investment from Wadhawan Group, a conglomerate with interests in a range of financial services sectors.
The deal, which is due to be announced in the coming weeks, will see Wadhawan and other investors inject roughly £40m into Zopa, one of the pioneers of the UK's financial technology sector.
News of the funding round comes just a fortnight after Zopa became the first big peer-to-peer lender to be authorised by the City regulator, breaking a logjam which had threatened to undermine the sector's development.
Peer-to-peer lenders provide a direct link between consumer savers and borrowers, tempting customers with generally more competitive interest rates.
Zopa's move into banking, which may go live next year, comes amid an influx of digital lenders into the UK banking sector.
The company has issued more than £2bn in consumer loans since its launch.
However, some critics have argued that peer-to-peer companies expose lenders to a disproportionate risk to their finances.
Zopa declined to comment on Friday.