The criteria that we would use to assess the future potential of the business and the returns on your
investment, based on Zopa’s position in the marketplace
and its internal capabilities are:
Total market size for
these products based on
the size of existing loans
market.
Average revenue earned
from each new borrower,
which is based on
'charging borrowers 1%
of their loan as a fee, and
from commission on any
repayment protection
insurance that the
borrower selects’.
Sub-set of market that Cost of customer
would meet Zopa's acquisition – this is a
lending criteria. competitive market and it
may be difficult to attract
visitors to the site, for
example, using search
engine marketing or
offline advertising.
Flexibility on revenue Lifetime value from
model – for example, customers based on
after launch, Zopa has attrition rates – will
gained additional revenue borrowers continue to
from lenders.
use Zopa or will they use
it as a one-off?
Cost of servicing sales – Conversion rate from
to what extent are phone visitor to lead to sale.
contacts needed to
facilitate sales.
From a strategic perspective, the issues that students should
consider are as follows:
• Proportion of total loans market that this service will appeal
to;
• Proportion of savings and investments market, this model will
appeal to. It is a lot of effort compared to other savings and
investments methods for a limited differential. As a result it will
only appeal to a limited number of investors.
• Will the number of lenders balance the number of borrowers
dependent on the appeal of the proposition as noted above?
• Business model scalability – can it be applied in other
countries and to other financial products or beyond?
• Technology costs and scalability.
The criteria that we would use to assess the future potential of the business and the returns on your investment, based on Zopa’s position in the marketplace
and its internal capabilities are:

Total market size for Sub-set of market that Cost of customer Cost of servicing sales – Conversion rate from
these products based on would meet Zopa's acquisition – this is a to what extent are phone visitor to lead to sale.
the size of existing loans lending criteria. competitive market and it contacts needed to
market. may be difficult to attract facilitate sales.
visitors to the site, for
example, using search
engine marketing or
Average revenue earned offline advertising.
from each new borrower, Lifetime value from
Flexibility on revenue customers based on
which is based on
model – for example, attrition rates – will
'charging borrowers 1%
after launch, Zopa has borrowers continue to
of their loan as a fee, and
from commission on any gained additional revenue use Zopa or will they use
from lenders. it as a one-off?
repayment protection
insurance that the
borrower selects’.