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Moneygator Takes Over E-Loan's U.K. Operations

[London, ENGLAND] Online loans provider Moneygator announced Tuesday it has acquired the operations of E-Loan UK from E-Loan Inc. in the United States.

The two parties did not disclose the terms of the deal.

Established in November 1999, E-Loan UK was a joint venture between E-Loan Inc. and venture capitalist eVentures which is jointly owned by epartners and Softbank.

Despite rapid expansion of U.K. activities during 2000 - including the launch of a specialist car finance service in September -- E-Loan's investors decided last year to scale down European operations and concentrate on the home market.

Moneygator says it will now consolidate the mortgage operations and re-launch the car finance service in April, adding many more lenders to the range.

Henning Holter, managing director of Moneygator, claimed that the whole process of buying personal financial services online is beginning to take hold. His words were, however, fairly cautious -- "take hold" being not quite the same as "take off."

The longer term prospects look promising. Researchers believe that between 10 and 30 percent of personal financial services will be originated online within 3-4 years.

"The value and convenience of shopping around on an independent Web site and then completing an application online is very compelling to people, especially when supported by telephone support to answer any questions," observed Holter.

Holter said that by acquiring E-Loan Inc's operations in the U.K., Moneygator will significantly strengthen its position as the U.K's top aggregator of credit products on the Internet. He also pointed out that the car financing technology being acquired as part of the deal cost over £1 million (US $1.47 million) to develop.

"Car finance is already a big part of our personal loans business and we believe this purchase will make us the leading independent loans originator in this high growth product category," said Holter.

Moneygator operates Web sites that have around 0.10 million visitors per month and has processed applications for mortgages, personal loans and credit cards to a value of £250 million (US $367 million).

Moneygator's most recent round of funding was a US $20 million private placement in April 2000, mostly taken up by Atlas Venture.