Profile of Errol Damelin from Wonga: Hey Big Lender (Payday) | The independent

0

Errol Damelin “will hate this”. So says a friend of Wonga’s short-haired founder, currently sitting in the eye of the biggest moral storm God against Mammon this country has seen since the financial crisis.

The skinny South African had always set out to shake up the financial industry, but had never expected, let alone wished for, the maelstrom he is in now. For media attention has shifted from blaming multibillion pound banking giants for our current economic malaise to focusing on “payday lenders”. And, while Mr. Damelin might hate that phrase, the larger and more sophisticated of them is Wonga, the company that provides small, short-term loans at disagreeably high interest rates. According to the friend: “The only thing about him is that he really cares about being taken seriously, as a serious businessman who runs a socially acceptable business.

This seriousness is something that comes up over and over again from those who know it. Managers and staff repeatedly use expressions such as “very disciplined”, “really intense”, “totally focused on his business”, “extremely straightforward and dedicated” when asked about him. Someone who knows him well says, “When he runs a box for cricket patrons he is rarely the center of attention. Not like some of the brash, sporty tall South Africans you see in these places. But then, starting a business from scratch and making one with millions of customers in just seven years is no job for the frivolous. You don’t get the best Silicon Valley venture capitalists investing in your business making jokes and spending the day in bed.

A colleague says: “You are talking about a guy who was born in South Africa, studied in the US, had his first business in Israel and is now in his third serious business in the UK. He is not gentle, charming, and avuncular. He is clearly a very motivated man: competitive, focused and dedicated beyond belief. But another colleague describes him as “charismatic” with a “wicked sense of humor” that others less close to him might not see. Even when he turns off, it’s still very intensive stuff: training for a marathon or sea kayaking when he’s not spending time with his wife and kids.

Damelin’s story begins in South Africa, where he was born in 1969. He still has a strong South African accent today. He studied at the University of Cape Town, traveled to Israel after graduating in 1995 and worked in investment banking, before earning an MBA from Boston University. He created two companies before Wonga, the first being a steel wire manufacturer and the second an online company helping companies improve their supply chains. Successful and lucrative stuff, but discreet. All the while, he was looking to find an industry he could shake up with what he describes as a “disruptive” new business model.

Several ideas occurred to him – which he says he will take care of one day – but he stumbled upon the idea of ​​finance. “He viewed existing banks and finance companies as lazy institutions that take their customers for granted,” says a colleague. In other words, easy prey.

He realized that people, especially young people, would respond well to an online business making small, quick loans without jargon or hanging around. While still very tech-savvy (a fellow filmmaker recounts how “he’s obsessed with gadgets, always seems to have dozens of iPads and other kits lying around the office and seems to go through bluetooth headsets to the beat of. one per week ”), he knew he needed a good software developer as a partner. He didn’t have to look far – teaming up with Jonty Hurwitz, who ran a business in the same shared office. The couple have been together ever since.

To differentiate themselves from the home-based lenders and pawn shops that have plagued the payday lending industry, one of Mr. Damelin’s first hires – even before the website went live – was a communications manager, an extremely unusual decision for a tech start-up. He claims it wasn’t because they anticipated the huge reviews they were risking, but because they wanted to be frank and clear about how the business was run without using the kind of jargon that so irritates the public to About traditional banks. This includes a lengthy explanation of this annual interest rate of 5,853 percent. When the technology worked, the team launched a marketing blitz that resulted in Wonga signing sponsorship deals with Newcastle United and Blackpool, while also running their ads on billboards and television screens across the country.

This high profile and the company’s tremendous success in becoming the market leader is what has left it in the Archbishop of Canterbury’s sights this week. “Listen,” said one director, “Errol was not naive. He always knew there would be a controversy, some explanation to be made, but it went undetected. “

Although he does not hesitate to debate the ethics of his business with people who have done their research – sources say he “really enjoyed” his meeting with the Archbishop of Canterbury – he hates people. who criticize Wonga without having heard the facts first. The problem is that its view of the relevant facts is not necessarily the same as that of the public.

For example, using a cartoon character of a nice old grandmother to advertise high interest loans might be considered irresponsible, or the lending industry is not regulated with enough care to protect vulnerable people. MP Stella Creasy has described payday lenders as “legal loan sharks” – a phrase Damelin hates being attached to his business.

Ultimately, however, the principle of non-publicity as bad publicity means that it is the outspoken Mr. Damelin who has the final say. Sources say that over the past week, visits to Wonga’s websites have increased by more than 30%.

A life in brief

Born: Errol Damelin, 1969, South Africa.

Family: Lives in Primrose Hill, London, with his wife Julie and family.

Education: Boston University School of Management, University of Cape Town.

Career: After eight years in Israel, he became an investment banker and co-founder of Barzelan, a producer of galvanized steel wire. In 2000, he was the founder and managing director of Supply Chain Connect Ltd. In 2007, he founded Wonga, an online short-term loan company in the UK.

He says: “The way most people operate is that they take risks. We don’t. We take risks, but we get really good at taking risks.

They say: “Here is this guy who had no experience with this type of technology, but I have enough recognition of the role models of everything I have done to know that Errol was going to be a great entrepreneur. »Robin Klein of the Accelerator group

Leave A Reply

Your email address will not be published.