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Money machine: Errol Damelin, Wonga

Damelin’s ?taxi service is growing at the speed of light. Since the site went live in July 2008, Wonga has processed more than 1.4 million applications. Last year’s turnover was £18m, an increase of 313 per cent on the previous year. In 2011, Damelin predicts sales of more than £50m (and he says that’s a conservative estimate) and profits of £5m. As Martin Leuw, founder of software firm Iris and a judge at our 2010 Growing Business Awards, puts it: ?Wonga is a great idea and it makes money.

It’s a legitimate and robust business, which has attracted funding from Accel Partners (funders of Facebook), Greylock Partners (the investors behind MySupermarket.com and Digg) and Balderton Capital (funders of Bebo and Lovefilm). When Facebook’s backers describe you as ?truly disruptive , you know you’re doing something right. And Damelin is continuing to innovate. Earlier this year, he launched the country’s first credit application for the iPhone.

But how far can this business go” Damelin admits that the payments ecosystem and regulatory framework is ?very, very complex” and that setting the business up overseas will be fraught with difficulties: “This was never going to be a ‘simple business. It wasn?t dreamed up on a napkin over lunch. We always knew that we wouldn?t be able to just replicate the same model overseas.”

But Damelin isn’t fazed by the challenges ahead. He points to Spotify, the Swedish music-on-demand service struggling to launch Stateside due to licence agreements; Amazon, which is still in just seven countries for logistical reasons; and Betfair, whose US expansion has been stalled by online gambling restrictions. Damelin expects to launch Wonga abroad in 2012 but says he ll have to be selective about new markets, acknowledging that it will take A couple of years” to set up in each new country.

It’s Betfair’s success that Damelin wants to emulate. Betfair is one of Britain’s great online success stories. The founders [interviewed in Real Business in February 2009] have done a fantastic job in a controversial space. They?ve stuck to their values and they?ve executed brilliantly.”

So, can Wonga follow Betfair’s lead We d put money on it.

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