Prosper.com was the first peer-to-peer lending company to gain any significant traction in the United States. The company, along with its primary competitor Lending Club, faced some legal hurdles with the SEC in 2008 and 2009, but is now set to grow along with the peer-to-peer lending industry during the next several years.
A recent Gartner study suggested that the peer-to-peer lending industry would grow by 66% by 2013 to a total of $5 billion. With Prosper.com’s head-start in the industry, the company will very likely grow as the industry does during the next several years. Banks are decreasing their lending activities as regulators pressure them to increase their capital. As a result, borrowers are looking to get loans from other sources such as Prosper Marketplace’s peer-to-peer lending offerings. The company will almost certainly benefit from the overall growth in the industry.
Prosper has also announced two significant partnerships, one with Zero Motorcycles and one with People Capital. Zero Motorcycles allows its customers to purchase a motorcycle and get a peer-to-peer loan via the Prosper Marketplace to pay for the vehicle. Peer-to-peer student lending company People Capital’s partnership with Prosper is a referral partnership in which Prosper will send customers looking for student loans to People Capital and People Capital will send non-student loan borrowers to the Prosper Marketplace.
Prosper Marketplace will likely be due for some technology upgrades in its service in the next year or two. Prosper recently launched a mobile version of their website. Lending Club, a Prosper.com competitor, recently launched new loan searching tools that give investors better tools to find loans they want to fund. It’s likely that Prosper will expand their set of loan searching tools for its investors to match Lending Club’s offerings.
The company will likely also be looking for another round of venture capital in 2010. Last fall, the company took a $1 million bridge-loan to provide the company some short-term operating capital. Typically when a company gets a small round of funding like that, it’s either very close to profitability or is looking for some cash to tide the company over while it seeks out a larger round of funding. Prosper doesn’t release specifics about its company’s financial status.
2009 has resulted in a lot of positive Prosper.com news with the company finally getting past its issues with the SEC, two new partnerships and a new round of venture capital. 2010 will likely see a continuation of that direction with another significant round of venture capital, technology upgrades and new partnerships.
