Peer to Peer Lending Discussed on This Week in Venture Capital

The Podcast This Week in Venture Capital (TWIVC) discussed the return of the peer to peer lending industry with the two major companies in the arena closing a new round of capital during the last month.

Prosper Marketplace closed a $14.7 million Series D round of funding during the last couple of weeks from TomorrowVentures (Eric Schmidt’s investment vehicle; Court Coursey joining board), CompuCredit Holdings, with existing investors Accel Partners, Benchmark Capital, DAG Ventures, Meritech Capital Partners, Omidyar Network, QED Investors, Volition Capital. Lending Club closed a $24.5 million Series C round of funding from Foundation Capital (lead), with existing investors: Morgenthaler Ventures, Norwest Venture Partners, Canaan Partners.

TWIVC Co-Host Mark Suster commented, “What interests me is that with the credit crunch we know that credit has tightened significantly for businesses and consumers.  So there is likely robust demand from borrowers.  We also know that people with a bit of extra money are getting almost zero interest rate return on their money in banks.  Enter P2P lending.”

He added, ” I’m not arguing that this is a wise move to do with one’s money, just that it seems to have appeal.  In addition to the P2P deals covered below, on the show we also talked about some of my favorite financing startups (Wonga in the UK run by Errol Damelin, who is a superstar) and Affordit.com run by serial (and I mean serial!) entrepreneur Wil Schroter (I am an angel investor in Affordit).  I also talked about Virgin Money, a product that I have used to lend friends money in the past.”

Watch the video: