Headline Feeds
Online lender E-Loan (Nasdaq: EELN) announced today that it has received $26 million (US$) to help finance its push to gain a share of the online financial services market in Europe.
The Dublin, California-based company said that international joint-venture Atviso took a 37 percent stake in its European subsidiary in exchange for the investment.
Atviso is a joint-venture between Vivendi, a French telecommunications company, and Softbank, a leading Japanese Internet investment firm. The company has also backed Buy.com, Web hosting and services provider Interliant, direct marketing e-mail company Message Media and Internet communications provider Vstream.
Softbank's legendary chairman, Masayoshi Son, said the investment would help put E-Loan in the fast lane of Europe's online highway.
"E-Loan's entry into Europe heralds a revolution which is sweeping the global lending landscape," Son said. "E-Loan's ability to leverage the efficiencies of the Internet puts it at the forefront of the rapidly expanding online lending sector. E-Loan will be a major force in Europe, playing a central role in growing the financial services infrastructure for the European Internet."
On Loan Globally
E-Loan announced its international plans back in May, when it teamed up with French businessman Bernard Arnault to start its European subsidiary. Arnault is primarily known for his ownership of LVMH Moet Hennessey Louis Vuitton, the luxury goods group that produces Dom Perignon, Moet & Chandon, Christian Dior, Givenchy and other pricey items.
E-Loan also announced that it hooked up with Softbank in a joint-venture agreement to develop an online mortgage market in Japan and the Republic of Korea. Softbank took a 60 percent stake in that venture, with E-Loan taking the remaining 40 percent.
Keeping company with Softbank is generally considered to be a good strategy in the industry. The majority shareholder of Yahoo!, E*Trade and dozens of other Internet companies, Softbank lends considerable clout and resources. Atviso, for example, will provide E-Loan with capital, infrastructure and local support services in Europe, including costly marketing 
initiatives and technical facilities.
More Than Home Mortgages
E-Loan, which is predicting third-quarter revenues of approximately $5 million, has added credit card and small business loans to its portfolio of 50,000 lending products. The company also added auto loans when it purchased CarFinance.com from Bank of America in August.
Home mortgage lending remains key, however, and it is in that sector that E-Loan expects to grow substantially. Its mortgage refinancing business declined 38 percent recently -- which the company attributes to higher interest rates -- but its mortgage applications climbed 35 percent, bucking an industry-wide decline.
Deutsche Bank predicts that the online mortgage lending business will soar to $250 billion by 2003, accounting for a quarter of all mortgages in the United States.
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