Online Money Lender Wonga.com Gets $22.2 Million VC Funding

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Online Money Lender Wonga.com Gets $22.2 Million VC Funding

The funny thing about this recession is that it keeps throwing up some big money funding deals for useful online tools and services. The latest is London-based short-term, online money lender Wonga.com, which receives $22.2 million (£13.7 million) in a second round led by Accel Partners and Greylock Partners, joined by existing backers Balderton Capital.

Wonga offers cash advances of up to £750 for as long as 30 days and has processed 100,000 loans to date. But unlike your high street bank, Wonga processes loans automatically, 24 hours a day, using its own risk and decision-making technology to give an instant answer. The site charges interest based on the amount and loan period. The typical APR is an eye-watering 2,689 percent—but the company, which by law has to declare its APR, argues it doesn’t make sense to calculate its short-term transactions over 12 months; it would be like asking a taxi driver his annual rate.

Founder and CEO Errol Damelin says the site has “become profitable in a very short space of time”. Plus it’s pushing its own affliate marketing programme to attract advertisers to the site.

Patrick Smith

@psmith Jun 7, 2009 6:00 PM ET

Posted In: Money, M&A & Venture Capital, Venture Capital

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Bethany

I like Wonga. I've used the service and it does what it says on the tin.

Jess

Hmmm… very interesting. The site looks really good, and it seems like this guys know what they are doing (judging by the huge investments they got). I'm still not sure if this is something I would use but I'm sure loads of people will find Wonga VERY useful!

N. Baker

After reading this article I headed to the Wonga site and at first glance I wasn't encouraged to go beyond the homepage, however I did.
On further investigation you find a very informative site. Lots of information, nothing seems misleading and I think they achieve their goal of wanting to be transparent.
I can't find any fault with the service - sure the APR is indeed eye-watering - but Wonga does a good job of explaining that too.

Jules

Having access to Wonga is like having instant cash available around the clock. I know that if I'm ever in a pinch, I don't need to work around banking hours to sort some quick cash. Not that this scenario happens very often, but it's having the option that counts.