UK short-term money lender Wonga has been saved from going under by an emergency £10m cash injection.
According to Sky News, a group of high-profile tech investors intervened after the company’s chief executive issued a warning to shareholders about the company’s potential insolvency.
The publication states that the new fundraising is thought to have taken place at a valuation of approximately $30m (£23). Wonga had been eyeing a potential IPO in New York, a listing which would have valued the technology group at a hefty $1bn (£769m).
Sky News says sources close to the company said the fresh injection of cash had been received from well-known VC funds including Accel Partners and Balderton Capital.
Additionally, Sky News reports that Tara Kneafsey, Wonga’s chief exec, told fellow directors a couple of months ago that a rise in the volume of complaints made about loans completed before new rules were introduced in 2014 had resulted in a big rise in compensation payouts.
The lender’s cashflow troubles are thought to have become so acute that its board is now looking at potentially selling some of its assets as well as the possibility of raising more debt financing.