E-Loan New Zealand has been split in two, with its original home loan and credit comparison business to be handed off to The Warehouse.
Eventures, the joint venture that launched the local E-Loan franchise will concentrate on a new business-to-business part of E-Loan that will tout its underlying software for use by other businesses, rather than the E-Loan franchise itself.
It is not clear at the moment how many of E-Loan's 17 staff will join CEO Bruce Gordon in moving over to The Warehouse and how many will be made redundant, but the eVentures says the business will be "scaled down".
Shareholders in the consumer unit – The Warehouse, eVentures and E-Loan Inc – "will be reviewing the revised operating arrangements at the end of a 12 month period," according to a statement.
EVentures CEO Cindy Mitchener says E-Loan met its launch targets, but "I just think that the macro environment changed on it, just in terms of the tolerance of its shareholders for its return to profitability and the tolerance of the market to fund a business that would return to profit over a longer period of time."
Mitchener says the new business model – a first for E-Loan anywhere in the world – came out of discussions she had with E-Loan's US owners.
"We talked about ways to add value. What was there that was really valuable? And having had a look at the market's reaction in New Zealand and the opportunity to access the Asian market, I said why don't we do this?
"[E-Loan's software] is a comparative engine that at the moment is applied in a financial vertical – but in a technological sense it can be a comparative engine for anything. If you market it as a piece of software as opposed to an E-Loan brand, you can sell it to one country 20 times."
Eventures New Zealand secured the sole rights to license the technology in the Asian market and Mitchener says there has already been interest from three countries.
Mitchener says she knows observers have been wondering what eVentures will do with the $30 million it raised from an IPO this year apart from paying salaries. Prospects of launching 50 major internet brands in the next three years look to have evaporated.
"We just need to put it all into context. It was May when we floated so it's been seven months and in that time we have launched two businesses [E-Loan and MessageMedia], both of which have now brought in strategic partners.
"The dot coms that did everything fast and furious are the ones that are now paying the price. Careful market analysis has been a plus for us. Wise and careful consideration of the use of money is in our shareholders' interests – and it's far better than the tech wrecks with 20 failed incubations on their hands."