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.