SAN FRANCISCO, CA--(Marketwire - Jun 7, 2011) - Prosper.com, a social lending marketplace that brings together creditworthy borrowers with individual and institutional investors, today announced that it has raised over $17 million in funding from new investors Draper Fisher Jurvetson and Crosslink Capital. Existing investors Accel Partners, CompuCredit, Omidyar Network, TomorrowVentures, and Volition Capital also participated in the round. The Wall Street Journal recently named Prosper to "The Next Big Thing" list for 2011, which recognizes the 50 most promising venture-backed companies, selected from more than 10,600 U.S.-based companies.
Prosper also announced that Tim Draper, founder and managing director of Draper Fisher Jurvetson, and Jerome Contro, general partner and COO of Crosslink Capital, will join the company's Board of Directors.
"Broad access to affordable consumer credit remains one of the enduring challenges for the American economy," said Tim Draper, founder and managing director of Draper Fisher Jurvetson. "We have watched Prosper build a mature, successful model for opening up the capital markets directly to millions of hard-working Americans that are seeking to borrow or lend capital affordably and with a meaningful return. We are excited to be a part of it."
"Since October 2010, Prosper has experienced strong growth in personal loan originations on a monthly and quarterly basis," said Jim Breyer, partner at Accel Partners. "Additionally, the Company, through rigorous analytics and the detailed insight of over $200 million in social and online credit data, continues to create a compelling lender experience and has the opportunity to help create and lead an important new financial technology business that will be significant for both institutional and individual lenders."
"I am honored and humbled by the commitment and support we have received over the years from such successful and visionary investors," said Chris Larsen, chief executive officer and co-founder of Prosper. "We are on the cusp of achieving something truly remarkable: changing the way consumers access credit and how lenders earn returns on their investments for the better and for good. With this round of financing, we will continue to accelerate our monthly growth rate to provide even more Americans with an efficient, innovative and social way to obtain and invest in loans for consumers and small business."
"Over the last several years, Prosper has developed the Prosper Rating, a proprietary credit and risk scoring system derived from more than five years of social lending data," said Jim Catlin, Prosper's executive vice president of acquisition and risk management and former risk management executive at Capital One. "We've combined industry-best practices of credit leaders such as Capital One with proprietary social lending insights -- allowing us to consistently deliver best-in-category returns of greater than 10.4%* and lower-than-expected loss rates for investors."
Debt consolidation, home improvement and small business-related loans remain the leading loan categories on Prosper.com. To learn more about Prosper's lender returns, competitive personal loans and small business loans, please visit http://www.prosper.com.
Victory Park Securities acted as financial advisor to Prosper in connection with this transaction.
* Net Annualized Returns represent the actual returns on Borrower Payment Dependent Notes ("Notes") issued and sold by Prosper since July 15, 2009. To be included in the calculation of Net Annualized Returns, Notes must be associated with a borrower loan originated more than 10 months ago; this calculation uses loans originated through May 31, 2010. To calculate Net Annualized Returns, all payments received on borrower loans corresponding to eligible Notes, net of principal repayment, credit losses and servicing costs for such loans, are aggregated then divided by the average daily amount of aggregate outstanding principal for such loans. To annualize this cumulative return, the cumulative number is divided by the dollar-weighted average age of the loans in days and then multiplied by 365. Net Annualized Returns are not necessarily indicative of the future performance of any Notes. All calculations made as of March 31, 2011.
Borrower Rate: The interest rate borrowers pay on their Prosper personal loan.
Effective Lender Yield: Effective Lender Yield is equal to the Borrower Rate: (i) minus the servicing fee rate, (ii) minus estimated uncollected interest on charge-offs, (iii) plus estimated collected late fees.
Estimated Annual Loss Rate and Estimated Annual Return: Estimated Annual Return is the projected average annual return on funds invested in all loans with a certain Prosper Rating originated on our platform during the month. Expected Annual Return is calculated by subtracting the Estimated Annual Loss Rate for those loans from the corresponding Effective Lender Yield. The Expected Annual Loss Rate is the estimated principal loss on charge-offs for loans originated during the month, and is based on the historical performance of Prosper loans for borrowers with similar characteristics. The calculations of Effective Lender Yield, Estimated Annual Loss Rate and Estimated Annual Return require significant assumptions about the repayment of loans, and lenders should make their own judgments with respect to the accuracy of these assumptions. Actual performance may differ from estimated performance.
Loan Purpose: Borrowers who post listings in the Prosper marketplace are asked how they intend to use their peer-to-peer lending personal loan. The loan purpose reflects borrowers' statements of intended use of loan proceeds and is the percentage of total dollars funded for the month. Prosper does not verify or confirm after funding how loan proceeds are used.
About Draper Fisher Jurvetson
DFJ backs extraordinary entrepreneurs everywhere who set out to change the world. DFJ achieves its mission through its DFJ Global Network of Partner Funds with operations in the US, China, India, Korea, Vietnam, Russia, Europe, Israel, Brazil, and Japan. Over the past 25 years, DFJ and its partners have backed over 600 companies, and have pioneered the way in emerging technology markets including the Internet, mobile communications, clean energy and health care. DFJ has been proud to back industry changing successes including Baidu, Skype, Overture, Hotmail, Parametric Technologies, Focus Media, AdMob, Mobile365, EnerNOC, Tesla, SolarCity, Brightsource Energy, Athenahealth, Epocrates, SpaceX and Synthetic Genomics.
About Crosslink Capital
Founded in 1989, Crosslink Capital is a leading stage-independent venture capital and growth equity firm with over $1.5 billion in capital under management. Crosslink was among the first and largest investment firms in the U.S. to integrate public and private technology investing. This strategy allows Crosslink to partner with its portfolio companies on a long-term basis. With more than 20 years behind it, Crosslink Capital has invested in over 90 private equity portfolio companies, including Ancestry.com (NASDAQ: ACOM), Miller Heiman, Omniture (acquired by Adobe Systems), Pandora, SeaMicro, Twin Creeks Technologies, Virage Logic (NASDAQ: VIRL), and Yipes (acquired by Reliance Communications). For more information on Crosslink, visit www.crosslinkcapital.com.
About Victory Park Securities, LLC
VPS is an investment bank serving middle market businesses, growth equity markets, and institutional investors with innovative financial advisory services and capital solutions. With offices in Boston, Chicago, and San Francisco, VPS offers a national advisory footprint with a tailored, partner-level approach to every engagement. www.victoryparksecurities.com
Prosper Marketplace Inc. is America's first peer-to-peer lending marketplace with over one million members and more than $236 million in funded loans. Prosper allows people to invest in each other in a way that is financially and socially rewarding. Borrowers list loan requests between $2,000 and $25,000 with loan terms of 1, 3, or 5 years. Individual and institutional investors invest in minimum increments of $25 on loan listings they select. In addition to credit scores, ratings and histories, investors can consider borrowers' personal loan descriptions, endorsements from friends, and community affiliations. Prosper handles the servicing of the loan on behalf of the matched borrowers and investors.
Prosper was co-founded by Chris Larsen, co-founder of E-LOAN. Prosper has raised $74.85 million in venture capital and is backed by financial and technology luminaries including, Jim Breyer of Accel Partners; CompuCredit; Omidyar Network; Capital One Co-founder Nigel Morris of QED Investors; Court Coursey of TomorrowVentures; Larry Cheng of Volition Capital; Tim Draper of Draper Fisher Jurvetson; Jerome Contro of Crosslink Capital.
Notes offered by Prospectus.