Wonga launched in 2007 as one of the first online payday lenders in the UK. Using sophisticated algorithms, the company could approve loans in minutes. It became one of the UK's most prominent fintech companies, lending billions of pounds. At its peak, Wonga sponsored Newcastle United FC and was a household name.
Company Data
- Founded: 2007 — Errol Damelin, Jonty Hurwitz
- Failed: August 2018 (administration)
- Reason: Regulatory crackdown + compensation claims
Wonga's high-interest loans (representative APR over 1,500%) attracted fierce criticism from consumer advocates and politicians. The Financial Conduct Authority introduced strict caps on payday lending in 2015. Massive waves of customer compensation claims for irresponsible lending overwhelmed the company. Wonga entered administration in August 2018, writing off millions in debts.
Key Lesson
Businesses built on regulatory arbitrage are one regulation away from extinction. Build a business that can thrive under fair regulations, not one that relies on exploiting gaps.