Following on the heels of its push to sell mortgage loans in Japan and the Republic of Korea, online mortgage lender E-Loan, Inc. (Nasdaq: EELN) announced Thursday that it’s entering into a joint-venture with an Internet investment fund to provide loans to consumers in the UK, Australia and New Zealand.
The Dublin, California-based company said it has hooked up with eVentures — a new London-based firm that was introduced Thursday as a company whose mission was to incubate U.S.-based Internet companies expansion into the UK, Australian and New Zealand markets. They will each hold a 50 percent stake in the venture.
eVentures is jointly-owned by renowned Internet venture capitalists Softbank — a Tokyo-based investment firm whose equity stakes in Yahoo!, E*Trade and many more have made it a living legend in the industry — and epartners, an investment vehicle of News Corp., the media conglomerate owned by Rupert Murdoch.
eVentures was established in April and given $50 million (US$) in initial capital to place its bets on what it hopes will be the next generation of e-commerce winners.
“We believe that E-Loan’s proven business model will succeed on a global basis, so we are working closely with the company to help it move quickly into new markets,” said Softbank CEO, Masayoshi Son. “In reviewing candidates for eVentures, E-Loan was the obvious choice as a lead investment to showcase our commitment to helping great companies expand their reach.”
Growing Mortgage Business Up For Grabs
E-Loan’s CEO and co-founder acknowledged that the mortgage business differs greatly across the globe. Having a backer like Softbank will surely be a benefit as the company develops its product in the different markets. Softbank has a 60 percent stake in the two companies’ home mortgage joint venture in Japan and the Republic of Korea, which was announced in May.
Founded in 1996, E-Loan was backed by Softbank, Sequoia Capital, Yahoo! and others to the tune of $30.1 million in two rounds of funding. Still privately owned, the company has formed partnerships with over 40 companies, including Yahoo!, E*Trade, CBS MarketWatch, DLJ Direct and others.
E-Loan offers some 50,000 loan products from 70 lenders in all 50 states. It claims that it saves the average borrower $1,000 compared to traditional mortgage brokers and the company.
Recognized by Deutsche Bank as the leading online mortgage site by volume on the Internet, the 250-employee company is obviously hoping to cut a large slice of the home mortgage pie for itself. Deutsche Bank estimates that the online mortgage business will be grow to $250 billion in 2003, or almost 25 percent of all mortgages.