WONGA is set to float in the US in a listing that could value the controversial payday loans firm at more than £1bn.
It is considering joining Nasdaq or the New York Stock Exchange next year in another blow to the London stock exchange. It is believed to be choosing an investment bank to help it prepare with Barclays Capital, Goldman Sachs and JP Morgan Cazenove in the running.
Any float could lead to a lucrative return for co-founder Errol Damelin as well as backers Accel Partners, Balderton Capital, Oak Investment Partners and Greylock Partners.
Wonga made pre-tax profits of £16.6m on sales of £73.8m for the year to December 2010. Estimates have valued the company at up to £1.46bn, based on the flotation of LinkedIn, which achieved a valuation of 20 times its historic sales.
Wonga, which has been criticised by shadow business secretary Chuka Umunna, is likely to attract more scrutiny if it goes public. Last month it was censured by the Office of Fair Trading over its debt collection practices – although it is appealing – and yesterday the Consumer Credit Counselling Service, said: “Quite a few clients have had difficulty with Wonga. They market very aggressively so it is not surprising to have had problems with their reputation.”
Wonga has defended itself, however, saying its average first time loan is for just £160. It argues that it can be misleading to quote annual percentage rates because its loans are designed for much shorter periods. A spokesman described suggestions of a flotation as “speculation”.