KRUK has signed a letter of intent to acquire all shares in wonga.pl sp. z.o.o., a company operating on the online loan market in Poland. A final share purchase agreement and regulatory clearance will be needed to close the transaction.
“We have been operating on the consumer market for over 20 years, and we have been present on the loan market with our Novum brand since 2010. The investment in Wonga will help us to achieve scale and grow in the open loan market, but most importantly we are buying one of the most professional, ethical and consumer-oriented firms in this market in Poland. Credit risk management is key to long-term success in our industry, and Wonga has a complete Team in Poland, long-standing experience and advanced, or even exemplary, risk management process enabling the company to keep the loss ratio at lower-than-average levels. With this investment, KRUK will enter a new distribution channel where loans are sold exclusively online. Wonga is an innovative and efficient business organisation, but the key reason we want to invest in it is its Polish management team. Over seven years of presence in Poland, they have created one of the most recognisable and reputable consumer finance brands. I had the opportunity to watch them in action at work over the past few months. So I was not surprised at all by the excellent results of the corporate culture survey we performed during the acquisition process. Wonga has corporate DNA very similar to that of KRUK, and I believe that its management board and its entire team will lead Wonga as it blazes the trail to industry success just like the KRUK team have done for so many years,” said Piotr Krupa, President of the Management Board of KRUK S.A.
Wonga has been present in Poland since 2012 and currently employs more than Wonga people. It has provided over 1,5m of loans, and its customer base has exceeded 1,1 million. In 2017, the company generated PLN 100m in revenue. Wonga offers products for all market segments, selecting customers with the safest risk profiles compared to the rest of the industry.
“KRUK is a big, stable and ever stronger financial institution. To Wonga becoming part of the KRUK Group means new growth opportunities, with our professional credit risk assessment process unchanged and loss ratios kept at a safe level. Wonga was the first loan company to start working with the credit reference agency Biuro Informacji Kredytowej, setting a new standard for the industry. Today we use eight third-party databases to check customer creditworthiness. This does not make the process longer, as it is fully automated. Our customers receive the loan approval or refusal decision within minutes. Also, the risk assessment algorithm our team has developed is constantly upgraded and updated. We believe that financial institutions should not only offer quality products but, where needed, also protect customers against bad decisions. We are very happy to have found a partner who understands and supports this mindset. The way KRUK has been managed demonstrates that a startup can become a powerful corporate group capable of successfully competing on multiple markets. That is why we are so glad KRUK can see the potential of both Wonga and the loan market as a whole. Together we can accomplish more,” said Tomasz Fedyna, a member of the Management Board of wonga.pl sp. z o.o.
The KRUK Group has been in the lending business since 2010, offering its products under Novum brand, targeted at customers who have repaid their debts to the KRUK Group and need additional funds.
“Our decision to extend the scale of our business has coincided with an important shift in the market, which we support and consider an opportunity. The recent consumer-oriented regulatory and self-regulatory initiatives may create a competitive advantage for companies that have focused on customers and their needs from the very beginning. For many years, we have been making efforts to change the general perception of the debt management market. We believe that the loan market may undergo a similar evolution, with a major contribution from the Wonga team,” Mr Krupa added.