Payday lender Wonga considering US stock market flotation
Sunday 03 June 2012
Payday lender Wonga is reported to be considering a US stock market flotation that could value the business at more than £1 billion.
A “beauty parade” to choose two banks to lead the process is under way but no decision has been taken on whether to proceed, the Sunday Telegraph said.
Its report added that Wonga has rejected London as a venue for a market listing and will look to New York's Nasdaq exchange for the float.
Technology shares have fallen in the wake of Facebook's ill-fated flotation but using a multiple of 12 or 13 historic revenues a listing would still value Wonga in the region of £1 billion.
The company, which was recently criticised by the Office of Fair Trading, was founded in 2007 and has become one of the biggest players in a rapidly expanding sector.
Consumer Focus figures indicate that the payday loans market increased from 300,000 borrowers in 2006 to 1.9 million in 2010.
The industry has been accused of preying on those in financial trouble, prompting the OFT to investigate whether some firms target people unsuitable for credit and are rolling over loans so that the charges escalate and they become unaffordable.
Payday lenders have argued that they offer a much-needed service to customers and their high interest charges are often more transparent than those of mainstream banks.
Wonga's current backers include Balderton Capital, known for its investment in LoveFilm and Betfair, and Greylock Partners, one of the original investors in LinkedIn.
It was co-founded by current chief executive Errol Damelin and recently announced plans to offer small businesses loans of between £3,000 and £10,000 within 15 minutes.
The company, which uses automated risk-processing software, was criticised by the OFT last month for letters and emails that without appropriate justification suggested that some customers may have committed fraud. Wonga said it planned to appeal the ruling by the OFT.
- 1 Mario Balotelli: Staff at arson-hit Manchester Dogs' Home convinced Liverpool striker is behind five-figure donation
- 2 There is literally not a single woman in this iPhone 6 queue
- 3 Scottish independence: Tory revolt against 'devo max' grows as Rail Minister Claire Perry joins
- 4 Hitler’s former food taster reveals the horrors of the Wolf’s Lair
- 5 Scottish independence referendum: JK Rowling, Russell Brand, Nigel Farage and more react to the 'No' vote
Scottish independence referendum: Frankie Boyle reacts to nation's 'No' vote - 'To be fair, I've always hated Scotland'
Scottish independence referendum results: David Cameron pledges plans for 'English votes for English laws' by January
Scottish independence live: Scotland gives a clear 'No' in historic referendum - as it happened
Scottish referendum results: David Cameron set to unveil major devolution of powers to England
Hitler’s former food taster reveals the horrors of the Wolf’s Lair
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
Scottish independence referendum: A nation divided against itself
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Russia freezes Ukraine into submission: Kiev admits country doesn't have enough fuel for winter
Scottish independence: The Queen breaks silence on referendum debate – as think tank warns of £14bn black hole if Scotland votes Yes
Archbishop of Canterbury admits doubts about existence of God
iJobs Money & Business
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...
Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...
£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...