project
Zopa.com
This case study was written by Martin Kupp and Jamie Anderson of the European School of Management and
Technology. esmt cases are written solely as the basis for class discussion, and are not intended as endorsements, sources of primary data, or to represent either effective or ineffective handling of a management situation. Copyright ©
European School of Management and Technology, 2006
2006-case-20
Zopa
Introduction
The bursting of the dot-com bubble in the fall of 2001 marked a turning point in attitudes towards the implications of the Internet for business, and many people concluded that the web phenomenon had been over hyped. But the year
2006 saw a strong return of attention by companies, the media and consumers for new Internet-enabled business ideas. Far from having "crashed", the web seemed more important than ever, with exciting new applications and sites popping up with surprising regularity.
One of the new Internet firms grabbing headline attention was Zopa, a UK-based peer-to-peer online brokerage that coupled British residents who wanted to lend with those who wanted to borrow. Lenders proffered money not to individuals but to a pool of people grouped together because of similar creditworthiness. Launched in March 2005,
Zopa started with just 300 members, but within just a few months had grown to more than 25,000 users. By
November 2006 about 120,000 people had signed up, and more than £100,000 was being lent every day. Since
Zopa was not technically a bank and didn't lend money itself, the capital requirements to run the business were relatively small.
Zopa’s CEO James Alexander pondered the meteoric growth of his fledgling company. Some banking industry analysts believed that Zopa could do to retail lending what Skype, an Internet-enabled peer-to-peer communication technology, had done to the telecom industry by disinter-mediating incumbents. But what was so unique about this fledgling online venture? How
This case study was written by Martin Kupp and Jamie Anderson of the European School of Management and
Technology. esmt cases are written solely as the basis for class discussion, and are not intended as endorsements, sources of primary data, or to represent either effective or ineffective handling of a management situation. Copyright ©
European School of Management and Technology, 2006
2006-case-20
Zopa
Introduction
The bursting of the dot-com bubble in the fall of 2001 marked a turning point in attitudes towards the implications of the Internet for business, and many people concluded that the web phenomenon had been over hyped. But the year
2006 saw a strong return of attention by companies, the media and consumers for new Internet-enabled business ideas. Far from having "crashed", the web seemed more important than ever, with exciting new applications and sites popping up with surprising regularity.
One of the new Internet firms grabbing headline attention was Zopa, a UK-based peer-to-peer online brokerage that coupled British residents who wanted to lend with those who wanted to borrow. Lenders proffered money not to individuals but to a pool of people grouped together because of similar creditworthiness. Launched in March 2005,
Zopa started with just 300 members, but within just a few months had grown to more than 25,000 users. By
November 2006 about 120,000 people had signed up, and more than £100,000 was being lent every day. Since
Zopa was not technically a bank and didn't lend money itself, the capital requirements to run the business were relatively small.
Zopa’s CEO James Alexander pondered the meteoric growth of his fledgling company. Some banking industry analysts believed that Zopa could do to retail lending what Skype, an Internet-enabled peer-to-peer communication technology, had done to the telecom industry by disinter-mediating incumbents. But what was so unique about this fledgling online venture? How