Power to the People: Prosper Adds to List of VC Deals for P2P Lending Platforms
September 26, 2013
Prosper, a peer-to-peer lending platform, has secured $25 million in new funding led by Sequoia Capital, with participation from new investor BlackRock, as well as returning backers. The company has now raised about $120 million in funding to date, including a $20 million financing (also led by Sequoia) this past January that valued the company at $40 million.
Since bringing on a new management team in January, the Prosper platform has more than tripled its monthly loan originations, rising from $9 million in January to $32 million in August and bringing total loans to more than $600 million since inception. The new capital will help the company continue investing in infrastructure, products and customer acquisition in order to further fuel growth. Additional Prosper backers include Accel Partners, Draper Fisher Jurvetson and Benchmark Capital, among others.
Prosper isn’t the only P2P lending platform that has garnered the interest of VC investors. Several other companies in the space have landed VC coin recently, including Lending Club, which last raised $125 million in May 2013; SoMoLend, which was seeded with $1.17 million in May 2012; and Daric, which raised funding last year.
Throwing conventional lending methods to the wind, P2P lending benefits both consumers needing capital and individual investors who have capital to invest. Consumers benefit by getting lower interest rates than otherwise available through traditional institutions, while individual investors benefit by earning profits off higher interest rates than normally available to them through investments like savings accounts or CDs.