Web-based Lender Secures GBP73 Million Finance

Fri, 18 Feb 2011

Short-term online lender Wonga.com has managed to raise £73 million in equity funding to ensure further expansion in the UK market.

The London-based firm, which claims to have handled more than a million short-term loans since launching in 2007, attracted support from US venture capitalist Oak Investment Partners in its latest financing round.

Investment was also secured from a number of other sources including Meritech Capital Partners and Wellcome Trust, the UK’s largest charity and health-funding organisation.

Writing on the company’s blog, Wonga founder and CEO Errol Damelin said: "Welcoming more respected investors on board shows how much we have achieved in a relatively short space of time but, more importantly, it’s a sign of how much more we are going to achieve in the future."

"We have raised the money to secure our ability to continue growing strongly and to ensure we keep offering a premium service to our customers."

"We will keep investing in our technology platform and develop new ways of helping consumers manage their cash flow, based on our ability to make real-time and objective lending decisions."

Wonga.com enables people to apply for loans of up to £750 for up to 30 days. The company has, however, been widely criticised for its repayment terms, with annual interest rates on its short term loans often equivalent to around 2,700 per cent.

But the lender claims its core market is made up of young professionals who find access to short-term unsecured debt an attractive alternative to bank loans and credit cards .
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