Wonga is a short-term, high-cost payday lender whose core product was algorithm-driven small loans. After regulatory intervention the company wrote off loans of 330,000 customers, waived interest and fees for a further 45,000, and was censured for sending fake lawyers' letters, paying £2.6M in compensation. Following the FCA cap on high-cost short-term credit from January 2015, Wonga has been loss-making, reporting just over £80M loss for 2015 and £65M for 2016. Management says the business is undergoing a ‘transformation’ to offer fairer, more flexible loan products and had targeted a return to profitability, though 2017 results were not reported. Cashflow has been tight; Wonga sold its German payments business BillPay to Klarna last year for around £60M and the board is evaluating further asset sales and additional debt. To address increasing legacy compensation claims (driven by claims management companies), existing shareholders injected £10M to help fund those claims. Wonga operates a short-loans platform that uses realtime automated underwriting to assess users’ applications rather than people. The company offers short-term consumer loans and emphasizes a technology-driven credit decisioning system. It raised funding to support expansion capital and plans to use the proceeds to expand further in the UK, its home market. Financially, Wonga completed a £73 million ($117 million) Series C round to fuel that growth. The business has attracted both US and European venture capital in prior rounds, with past investors including Accel Partners, Greylock Partners, Balderton Capital, Dawn Capital and London seed fund TAG. Dawn Capital is noted as the only European VC to have invested in this round and has invested three times in the company. Wonga.com provides fully automated online short-term lending, letting applicants select exactly how much cash they need and choose the loan duration for advances up to 30 days. Its risk and decision technology delivers instant credit decisions and, if approved, deposits funds into customers' bank accounts within an hour at any time of day or night. Since launching in the UK eleven months ago, Wonga has provided nearly 100,000 flexible cash advances. The company emphasizes a completely online, 24/7 credit solution as its unique selling proposition. Wonga closed a $22.25M funding round to finance a worldwide roll-out. The article does not disclose revenue figures or other financial metrics beyond the funding and operating usage statistics. Wonga plans to offer nearly instantaneous personal loans in the UK, with typical advances ranging from £200–£1,000 and application-to-deposit times around 20 minutes. The product targets borrowers with decent credit who are not already in debt and uses a "trust rating" that raises allowable loan amounts after on-time repayment. First loans up to £200 carry a flat fee of £25 plus 1% interest per month (about a 13.8% APR). Wonga does not draw lending capital from a bank; its loan risk is underwritten by an undisclosed partner. The company has not yet launched publicly and faces competition from both UK payday lenders and person-to-person platforms like Prosper, LendingClub, and Zopa. It recently raised funding to support expansion and infrastructure build-out.

Total raised

$159M

Funding rounds

4

Latest round

Equity

Latest activity

Aug 2018