Global Economics

Online Mortgage Rates? Ooh-la-la...


It didn't take long for Meilleurtaux to prove to reluctant French banks that its service would pay off

When Paris-based online mortgage broker Meilleurtaux launched in 1999, founder and chief executive Christophe Crémer had a hard time convincing banks to work with him. Though similar sites in the U.S. such as E-Loan (BPOP) had long enjoyed success, bankers across the Atlantic were skeptical Meilleurtaux (French for "best rate") would take off. Crémer forged ahead anyway—and soon racked up the numbers to sway any disbeliever. "I showed them the site was getting over 40,000 applications a month and that it wouldn't be profitable for them not to work with us," he says.

Meilleurtaux now partners with all French banks to negotiate low interest rates for customers, who file mortgage applications online and are guided through the loan process by the company's financial advisers. Meilleurtaux, operated by parent company Omnigain (MEX.PA), brought in revenues of more than $65.3 million last year, a 74% increase over 2005, and has now begun opening brick-and-mortar branches—some 52 already in France, plus 60 franchises that sell insurance and provide mortgage refinancing services. It was the first company to be listed on Alternext, a trading market for small and midsize firms, in 2005, and soon graduated to the bigger Eurolist in October, 2006.

Finding a Niche and Working It

Doggedness has marked the endeavors of serial entrepreneur Crémer ever since he launched his first startup with his twin brother, Alain, and a friend in Alain's bedroom in 1984. Their company, Sybel Informatique, developed business software for small firms. His banker friends insisted the market was already saturated, but Crémer and his partners paid no heed. In 1995, they sold Sybel to British accounting software powerhouse Sage (SGE.L) for the equivalent of $40.5 million.

The idea for Meilleurtaux came shortly after, when Crémer's brother-in-law took out a loan for his house. He had visited only two banks before deciding on a mortgage, he told Crémer, because the process was so boring and time-consuming. "I thought, this is something the Internet could do," Crémer says. His idea works in the banks' favor, too, because "rather than doing 10 meetings and getting one customer, they can do two meetings and get two customers."

Meilleurtaux's rise over the past three years has continued into 2007, with first-half revenues up 13%, to $34.7 million. But the company has experienced some growing pains. First-half profits fell 27%, to $863,000, in part because of heavy investments in new services.

In September, three of Meilleurtaux's venture capital investors—Ventech, Galileo Partners, and Edmond de Rothschild Investment Partners—sold their 50.14% combined stake in the company to French bank Caisse d'Epargne for $58.74 a share. Meilleurtaux will be rolled into a holding company that ultimately will include the Caisse d'Epargne bank, real estate firm Nexity (NEXI.PA), and insurance companies MACIF and MAIF.

Jennifer Fishbein is a reporter in BusinessWeek's Paris bureau .

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