Zopa has hired JPMorgan to advise on a £100 million funding round, according to Sky News.
Investors who have been approached about the raise told Sky News that Zopa was targeting a post-money valuation in excess of £500m.
Zopa in March landed £20 million from existing investors after picking up £250 million in deposits following the launch of its app-only bank last year.
Initially launching with a one-to-five year fixed term savings account, the banking operation has since moved into credit cards, unsecured loans and auto-finance, lending £5 billion to customers.
The firm says it has seen annualised revenue per customer almost doubling in the period since launch.
The new funding round is expected to be its last ahead of a public float sometime in the next 18 months.