Wonga rallies to raise £73 million

Short-term online lender Wonga has raised £73 million in its latest financing round, attracting American firm Oak Investment Partners to back the London-based business after recent strong growth.

Venture capital firm Meritech Capital Partners, which has backed Facebook, and charity and health-funding organisation Wellcome Trust, joined existing backers Accel Partners, Balderton Capital, Dawn Capital, Greylock Partners and TAG, in investing in the round.

Wonga founder and chief executive officer Errol Damelin writes on the company blog that the injection of capital will enable the business to protect gains made in the UK market.

Damelin writes, ‘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.’

Launched in October 2007, Wonga enables people to apply for loans of up to £750 for up to 30 days. It has come under criticism for offering loans that can have an equivalent to an APR of 1,000 per cent and above.

But Damelin says the business’s customers are mostly young professionals who have access to other forms of credit and are choosing the online business ahead of bank overdrafts or credit cards.

Nick Britton

Nick Britton

Nick was the Managing Editor for growthbusiness.co.uk when it was owned by Vitesse Media, before moving on to become Head of Investment Group and Editor at What Investment and thence to Head of Intermediary...

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