The chief executive of Augmentum Fintech, Tim Levene, says that digital bank Zopa needs to focus on growing its market share before it contemplates an IPO.
Levene's dictum to Zopa, in which Augmentum Fintech has a substantial stake, appears to fly in the face of current trends for fintechs to forsake growth in favour of reaching profitability.
Zopa has made no secret of its desire to go public ever since it notched up its first profitable month in April last year. The digital bank sees profitability as a key pre-requisite for a market float.
Speaking to The Times, Levene says that that while Zopa had shown that it could generate a profit, there is still an opportunity for it to grow market share.
“In my view the business is not in a position where it has to focus on profitability at all costs, at the expense of growth,” he told the broadsheet. “Ultimately, there is still a long way to go. From my point of view, their focus over the next 12 to 18 months should be carrying on executing the business that they’re building and not worrying too much about the exit.”
Having made its name as a P2P lending pioneer, Zopa pivoted two years ago to become a traditional bank, and has since amassed 800,000 customers and £3 billion in deposits. Earlier this month it made its first growth-focused acquisition, buying BNPL player DivideBuy from the proceeeds of a £75 million M&A warchest that was raised in January.