Errol Damelin is best known as the founder of Wonga, the controversial payday lender. But he’s also quietly become one of London’s most successful angel investors, with two of his portfolio companies — Wise and Cazoo — securing billion-dollar exits this year.

Damelin’s stakes in Wise and Cazoo hit a combined worth of £11.6m* when the companies listed, meaning Damelin banked a 108x return on his original investments, according to a Sifted analysis of Companies House.

Public records show that Damelin was among the startups’ first investors, writing a £48k cheque in Wise’s 2011 seed round and investing ~£72k in Cazoo’s seed three years ago.

Angel investors like Damelin, as well as VCs, have enjoyed a healthy payday during the recent string of European tech IPOs.

Notably, Damelin is also among a growing group of European founders-turned-investors, who repurpose their wealth into the next generation of startups. This includes the likes of Taavet Hinrikus (who Damelin himself invested in, as the Wise founder), Monzo’s Tom Blomfield and Richard Branson.

In Damelin’s case, he’s arguably had more success as a ‘super angel’ than as an entrepreneur. Wonga was initially heralded as one of the UK’s first fintechs, helping to automate speedy online lending, and even eyed a £1bn public float. However, the company eventually fell into administration in 2018, having racked up a string of bad loans and fines.

Damelin was also criticised for selling millions in Wonga shares amid controversy in 2013. The buyback was coordinated by the company itself, which had raised funds from Accel, LocalGlobe and Balderton Capital.

Damelin declined to comment for this piece.

The (discreet) super angel

Damelin’s wins from Cazoo and Wise won’t be a surprise for those who know him.

He’s built up an impressive, international angel portfolio over the last decade across more than 50 companies, with a particularly heavy presence in Israel and broader Europe.

That includes dozens of fintechs like Habito, Nested, Farewill, and Tide — the latter of which Damelin incubated from scratch as a cofounder, according to Companies House. He’s also begun to back several crypto companies.

That inadvertently puts Wonga at the centre of the next generation of financial services.

“Around 40% of Damelin’s investments have been in fintech,” said one source close to him. “The other lot are mostly in health or wellness” including rising startups like Second Nature, Yulife and K-health.

Damelin is also continuing to invest at pace, backing 12 founders over the past 12 months — several of which have female founders — the source added.

“He’s trying to be more conscious about diversity, aiming to have a portfolio of founders that is 50% non-white male.”

By multiple accounts, the 52-year-old spends most of his time supporting his angel portfolio and incubating his own companies. Two founders interviewed by Sifted say he’s a hands-on mentor, particularly early on in a startup’s life (he’s said to lose interest as companies scale and avoids sitting on boards).

“Errol sits in a very small and special category of early investors. He knows how stuff works in detail and is incredibly passionate about getting companies off the ground. He’s intense and helpful… without trying to get credit,” says Wise’s Taavet Hinrikus.

Those who work with Damelin also say he’s put the Wonga saga in the past, having left the company 7 years ago and learnt from its downfall — including cries of it being a “legal loan shark.”

Still, Damelin broadly enjoys a low profile. He rarely appears at tech events and demands discretion among his portfolio founders. He’s also a lone wolf; he does not invest other people’s money in a formal fund.

That hasn’t stopped him from making a name for himself — or cashing in on top startups. In other words, the veteran entrepreneur has found a new way to win.

* A note on the calculations

For those interested, we worked out Damelin’s holdings — assisted by Beauhurst — using the following:

On Wise (Previously Transferwise)

According to public records, Damelin invested ~$48k in Wise during its $1.3m seed round in 2011 (via his entity Rhythm Ventures).

By the time of Wise’s direct listing, Damelin owned 30,506 shares, which are now worth £8.5m (the company listed at £10bn).

Note, there is no guarantee Damelin has sold his stake yet in Wise on the public exchange. That means his return could still increase.

On Cazoo

Public records suggest Damelin invested around $100k during Cazoo’s seed round in 2018, under the entity Revolutionary (Ad) Ventures 38.

In February this year, Damelin’s entity held nearly 368,000 ordinary shares in Cazoo. On the day the Cazoo SPAC listed at £6bn (or £8.43 per share), that would have given Damelin a stake of ~£3.1m.

It’s worth noting that Damelin can’t sell his stake yet, given investors’ shares are locked up for 6 months with SPAC mergers. Hence, the final share price could still change.

Isabel Woodford is Sifted’s fintech correspondent. She tweets from @i_woodford.