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Archivo del Autor: Belen De Leon

Wonga investors inject £10M so cash-strapped payday lender can fund claims

If you were at Disrupt London four years ago you may remember more than a little awkwardness during an investor panel when two VCs that had invested in European payday loans firm Wonga declined to comment on what had gone wrong at their portfolio company in the wake of a £220M write down.

Yesterday Sky News reported that those same two, Accel Partners and Balderton Capital, are among a group of Wonga investors that have agreed to inject a further £10M (~$13M) into the business to help fund compensation claims related to its past censured practices.

We’ve reached out to Accel and Balderton for comment.

Prior to the latest emergency funding, Wonga had raised a total of around £145.5M, according to Crunchbase. Its 2011 Series C round was backed by investors including Accel, Oak Investment, Meritech Capital, 83North; while a 2009 Series B included Accel, Balderton, Dawn Capital, HV Holtzbrinck Ventures and 83North. It was founded in the UK in 2006.

By 2014 rising concern about the rates of interest being charged to vulnerable customers on short term loan products led to a regulatory intervention to clean up the sector, and Wonga agreed to write off the loans of 330,000 customers.

It also agreed to waive the interest and fees for a further 45,000 after admitting its automated checks had failed to adequately assess affordability. The algorithmic technology it had touted as its core IP had been lending money to people who did not have the income to pay it back.

The company was also censured by the Financial Conduct Authority (FCA) for sending fake lawyers’ letters to customers in arrears — and had to pay out a further £2.6M in compensation for that.

Four years later Wonga is still paying the bill for its past conduct — in the form of increasing numbers of individual compensation claims.

In a statement issued to Sky News, a Wonga Group spokesman said there has been a “marked increase” in compensation claims for legacy loans driven by claims management companies.

“Wonga continues to make progress against the transformation plan set out for the business. In recent months, however, the short-term credit industry has seen a marked increase in claims related to legacy loans, driven principally by claims management company activity,” the spokesman said.

“In line with this changing market environment, Wonga has seen a significant increase in claims related to loans taken out before the current management team joined the business in 2014. As a result, the team has raised £10M of new capital from existing shareholders, who remain fully supportive of management’s plans for the business.‎”

According to Sky News, Wonga was on the brink of insolvency when its investors agreed to inject more capital into the business, with CEO Tara Kneafsey‎ warning its institutional shareholders in late May the company risked becoming insolvent without a capital injection.

Following the shredding of its original business model — with the FCA’s cap of 0.8 per cent per day for all high-cost short-term credit loans applying from January 2015 — Wonga has been loss making for the past several years, reporting a £65M loss for 2016 and just over £80M for 2015.

And Sky reports that its latest emergency fundraising took place at valuation of just $30M (£23M) for the business.

This represents a swingeing haircut for a company that, in 2012, had believed it was on a three-year growth path to a £15BN valuation, i.e. off the back of short term loan products that charged annual interests rates as high as 5,853% that were sold to hundreds of thousands of people who couldn’t afford to pay them back.

Wonga’s website now lists as “representative” an APR of 1,460% in an online FAQ — and further claims: “We’ve introduced lots of changes at Wonga to make sure we offer better, fairer loans to customers. We take a responsible approach and lend only to those we believe can reasonably afford to repay.”

As part of this process of ‘transformation’ — i.e. from algorithmic loan sharking to regulatory compliant short term lending — one recent focus for Wonga’s executive team to try to drum up ethical business has been on offering more flexible loan products.

Sky says Wonga’s board has previously expressed confidence it can build a sustainable business, and notes the company had been targeting a return to profitability last year but has yet to report its results for 2017.

According to its sources, Wonga’s cashflow situation has become so tight its board is evaluating the sale of some of its assets in addition to raising more debt.

Already last year wonga sold off its German payments business, BillPay, to Klarna — raising around £60M.


Source: TechCrunch

Sorry, but your iPhone or Android phone is going to get even more expensive – CNET

You thought a $1,000 iPhone was bad? It may be just the beginning.
Source: CNET

Brabham's track-only BT62 will make its US debut in Monterey – Roadshow

The car will be on display all over the peninsula during car week and will serve as a rolling tribute to Dan Gurney.
Source: CNET

Digital Storm Equinox (2018) review: Lots of gaming power in a slimmed down design – CNET

This understated 15-incher gets you high-performance graphics and the personal touch of a boutique PC maker for less than $2,000.
Source: CNET

Loopholes and the 'Anti-Realism' of the Quantum World

After researchers found a loophole in a famous experiment designed to prove that quantum objects don’t have intrinsic properties, three experimental groups quickly sewed the loophole shut.
Source: Wired

How to Stay Safe on Public Wi-Fi

Connecting to a public Wi-Fi network can put you at risk. Here’s how to minimize the damage.
Source: Wired

Could Snap save the internet from fake news? Here’s the company’s secret weapon

Snapchat recently leant its support to work by the University of California, Riverside, who have developed an algorithm that can root out fake news online. Here’s how their tech works.

The post Could Snap save the internet from fake news? Here’s the company’s secret weapon appeared first on Digital Trends.


Source: Digital trends

Only 24 hours left to apply for Startup Battlefield MENA 2018

Time is running out for the best entrepreneurial tech minds and makers across the Middle East and North Africa to compete in TechCrunch Startup Battlefield MENA 2018, which takes place in Beirut, Lebanon on October 3 at the Beirut Digital District. Applications to our premier startup-pitch competition close in just 24 hours. We’ve been traveling around the Middle East and North Africa meeting incredible entrepreneurs in the regional ecosystem and are excited to shine a light on the brilliant innovation happening there.

If you think your pre-Series A startup has what it takes to be named “the Middle East and North Africa’s Most Promising Startup,” don’t waste another minute. Apply right here, right now before the 24-hour clock runs out.

Why should you apply? Well, for starters, the winning team receives US$25,000 in no-equity cash and a trip for two to compete in the Startup Battlefield at TechCrunch Disrupt in 2019 (assuming the company still qualifies to compete at the time).

Then there’s the priceless exposure that comes from placing your startup smack dab in front of influential technologists, VCs and media. The life-changing potential is very real.

Plus, all participating founders — not just the ultimate winners — become part of the Startup Battlefield alumni network. This community consists of almost 750 companies that have collectively raised more than $8 billion in funding and produced more than 100 exits. Names like Mint, Dropbox, Yammer, TripIt, Getaround and Cloudflare. That’s some prime networking territory.

Here’s how the competition works. Our TechCrunch editors — who have a knack for identifying high-potential startups — will review all eligible applications, then select 15 pre-Series A startups to compete (more on eligibility in a minute). The founders of each Battlefield team receive free, expert pitch coaching from TechCrunch editors, so they’ll be prepared to step onstage and face a panel of four judges — consisting of top entrepreneurs, technologists and investors with relevant experience in each tech category.

Startup Battlefield MENA 2018 begins with three preliminary rounds — five startups per round will each have six minutes to pitch and present their live demo. The judges have six minutes following each pitch to ask rigorous questions. Thanks to all that free pitch coaching, you’ll be ready to answer them.

The judges choose five startups to go to the semi-finals for a second round of pitching to a different set of judges. The judges will confer and choose one winner to be the first Startup Battlefield MENA champion. Let the celebration begin!

Let’s talk eligibility. Here are the basic requirements that founders must meet:

  • Have an early-stage company in “launch” stage
  • Be headquartered in one of these eligible countries: Algeria, Armenia, Bahrain, Egypt, Georgia, Iraq, Israel, Jordan, Kuwait, Lebanon, Libya, Mauritania, Morocco, Oman, Palestinian Territories, Qatar, Saudi Arabia, Tunisia, Turkey, UAE, Yemen
  • Have a fully working product/beta reasonably close to, or in, production
  • Have received limited press or publicity to date
  • Have no known intellectual property conflicts
  • Apply by August 6, 2018, at 9 p.m. PST

If you’re detail-oriented, read our Startup Battlefield MENA FAQ.

TechCrunch Startup Battlefield MENA 2018 takes place in Beirut, Lebanon on October 3. You have nothing to lose and so much to gain. But you have only 24 hours left to apply. Time runs out on August 6 at 9 p.m. PSTApply here today.


Source: TechCrunch

The Explosive-Carrying Drones in Venezuela Won’t Be the Last

There’s still no good defense against drones attacks like the one that targeted Venezuelan president Nicolas Maduro Saturday.
Source: Wired

Patrick Stewart will star in new Star Trek TV series as Jean-Luc Picard on CBS All Access – CNET

CBS says the series will relate the next chapter in Picard’s life.
Source: CNET

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