Prosper.com, a popular peer-to-peer lending marketplace in the U.S., has received a $1 million infusion from Nigel Morris, co-founder of Capital One, via his venture capital firm QED Investors. This brings the company’s total funding to over $41 million from Accel Partners, DAG Ventures, Fidelity Ventures and Benchmark Capital, among other investors.
Prosper pioneered the idea of concept of people-to-people lending in the U.S with its launch in 2006. Unfortunately, the startup hit a rough patch last year when the SEC stopped all lending on the platform because the company didn’t register as a seller of securities. With the new climate of heightened regulatory oversight in light of the financial meltdown, the SEC is being more judicious about overseeing financial institutions.
The startup was able to re-launch its site over the summer after the SEC gave Prosper the OK to facilitate peer-to-peer lending. Prosper became the first and thus only Internet auction-based P2P loans platform to have its registration statement declared effective by the SEC. Prosper is currently available for lenders in California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Louisiana, Maine, Minnesota, Missouri, Montana, Nevada, New Hampshire, New York, Oregon, Rhode Island, South Carolina, South Dakota, Utah, Virginia, Washington, Wisconsin and Wyoming.
The idea is excellent but execution certainly had his flaws. See prospers.org. The problems with the FEDs also remind me of the Paypal story.
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“Prosper became the first and thus only Internet auction-based P2P loans platform to have its registration statement declared effective by the SEC.”
WRONG!
http://blog.len...c-registration/
http://www.cent...ec-quiet-period
http://findarti...4/ai_n30891419/
use the search button next time…
…..
“’Prosper became the first and thus only Internet auction-based P2P loans platform to have its registration statement declared effective by the SEC.’”
WRONG!
http://blog.len...c-registration/
http://www.cent...ec-quiet-period
http://findarti...4/ai_n30891419/
use the search button next time…
chris larsen can spend $1M in 5 minutes. buhbye money.
Prosper got shut down by the SEC and is being sued by their investors. Lending Club was the first to register with the SEC and is doing a much better job
Sorry but Prosper was the first, the oldest and the biggest
This is a loan a 15%!! Here’s the SEC filing: http://www.sec....p8k11092009.htm
Leena, your posts are usually well researched and fact-checked, but this headline is out of left field and very Arringtonesque…
Nigel Morris is pretty much the EXACT OPPOSITE of an “Old Line Banker”. Capital One was founded with a completely new and data-driven approach to banking, and changed the credit card industry single-handedly… about 10 years ago, which even in Internet Time is hardly “Old Line”.
And QED has has made early stage investments in dozens of very cutting edge (and TC-profiled!) companies.
Capital One re-defines poor customer service and represents everything wrong with the stereotypical bad banker.
They charge exurbanite rates, manipulate their customers to maximize profits.
Wow. I love the idea of peer-to-peer lending but Prosper.com isn’t the one to lead the way. Just search their name and you’ll find dozens of former lenders that ran into lots of problems. The biggest problem seemed to be that Prosper was more than happy to match lender to borrower but when the borrowers quit paying back the loans, Prosper was long gone. They go their “fees” and couldn’t care less whether or not the loans ever got paid. I lost $500 and thank goodness that’s all. There’s a dude named Fred who runs a blog dissecting Prosper; they should name him CEO.
Of all people, Mr. Morris should know better than to invest in this failing business. He will come to rue the day he made this investment. $1M will not go very far with this company. Prosper will deadpool before long.
Let’s be clear that Proper and it’s ilk are investment sites. When an individual choose to “lend” to someone, they are actually investing in a note that backs the loan. The is no direct relationship, or recourse, between the people putting up their money and those borrowing it. This is why Prosper and others had to be securitized. What a great deal for them. They lend money (and get the lion’s share of the profit) and get people to essentially guarantee the loan. The only one at risk is the investor they call a lender.
So invest with them with your eyes open.