Prosper Closing in on $200 Million in Loans and Series D

SAN FRANCISCO--(BUSINESS WIRE)--Prosper.com, the world’s largest peer-to-peer lending marketplace with nearly one million members and over 32,000 funded loans totaling over $193 million, today announced that the company entered into a Letter of Intent with new and existing investors for a Series D round in the range of $13.3 million to $15.8 million. Prosper expects the closing to happen no later than April 15, 2010. Prosper has raised a total of $43 million to date.

“soar at least 66 percent to $5 billion of outstanding loans by 2013.”

Prosper maintains approximately two-thirds of the U.S. peer-to-peer lending market and, according to Deutsche Bank Research, Prosper is the largest peer-to-peer lending marketplace worldwide. Gartner Research has forecasted that the peer-to-peer lending industry will “soar at least 66 percent to $5 billion of outstanding loans by 2013.” Prosper crossed the $1 billion mark in consumer loan demand in March 2008 and is now up to $1.8 billion in demand.

Prosper also released statistics for February 2010. In February, the average borrower credit score on Prosper was 724 with 40% of loans going to borrowers with credit scores of 760 or higher, and 26% of loans going to borrowers with scores between 720 and 759. Debt consolidation remains the overwhelmingly most popular use case on Prosper, accounting for 56% of February loan volume.

“As peer-to-peer lending enters the next stage of its evolution, it is clear that the industry will become a third way of banking,” said Chris Larsen, Chief Executive Officer and Co-founder of Prosper. “A way of consumer lending that is more durable and transparent than the now discredited Wall Street securitization schemes; more opportunistic for lenders; and fairer for borrowers compared to credit card companies in particular.”

Larsen continued, “With the persistent disruption of the traditional banking system, there is a world of opportunity to continue to drive great loan assets to our lenders. Our approach to the risk/return tradeoff is disciplined and being honed by Prosper’s world class risk and analytics leadership, and the richest, thickest set of peer-to-peer lending data available. The result is dramatically improved lender performance.”

Prosper February 2010 Statistics

Prosper Rating	Borrower Rate	Lender Yield	Estimated Loss Rate	Estimated Return	Average Loan Amount	Loan Volume	% of Funded Loans
AA	9.23%	8.23%	1.31%	6.92%	$6,613	$416,589	24%
A	9.63%	8.63%	2.10%	6.53%	$5,399	$502,148	29%
B	15.65%	14.65%	5.00%	9.65%	$8,296	$199,100	12%
C	20.77%	19.77%	7.20%	12.57%	$2,862	$191,725	11%
D	27.15%	26.15%	10.00%	16.15%	$4,212	$248,480	14%
E	32.32%	31.32%	14.27%	17.05%	$2,971	$50,501	3%
HR	33.86%	32.86%	20.41%	12.45%	$3,225	$109,653	6%
All Funded Loans	16.22%	15.22%	5.48%	9.74%	$4,813	$1,718,196	100%

Prosper Peer-to-Peer Borrower Loan Purpose

		Funded Loans
Debt Consolidation		56%
Business Use		11%
Home Improvement		10%
Education		3%
Auto / Vehicle		4%
Other Use		16%

About Prosper

Prosper is the world’s largest peer-to-peer lending marketplace with approximately one million members and over $193 million in loans. Prosper pioneered peer-to-peer lending, which allows people to invest in each other in a way that is socially and financially rewarding. Prosper's auction model provides an open and transparent way to get a personal loan or invest in loans on terms that are favorable to everyone involved in the transaction.

People and institutions list and bid on loans using Prosper's online auction platform. Borrowers can list loan requests between $1,000 and $25,000 on Prosper and set the maximum rate they are willing to pay an investor for the loan, and tell their story. People and institutional investors register on Prosper as lenders, then set their minimum interest rates, and bid in increments of $25 to $25,000 on loan listings they select. In addition to criteria commonly used by institutional lenders, such as credit scores and histories, Prosper lenders can consider borrowers' personal stories, endorsements from friends, and community affiliations.

Once the auction ends, Prosper takes the bids with the lowest rates and combines them to facilitate the funding of one simple loan to the borrower, and then issues what are called "Notes" to all the winning bidders. Prosper handles all on-going loan administration tasks including loan repayment and collections on behalf of the matched borrowers and investors. Prosper members are then able to trade Notes with other members on the Folio Investing Note Trader platform, provided by Foliofn Investments, Inc. Follow Prosper on twitter @prosperloans

Notes offered by Prospectus.

Definitions

Borrower Rate: The interest rate borrowers pay on their Prosper personal loan.

Lender Yield: Yield percentage is the lender's effective yield net of servicing fees, based on the borrower's interest rate. The funding forecast graph (found on every P2P loan listing) will let you know the likelihood that a loan will be fully funded.

Estimated Loss Rate: Estimated average annualized loss rate is based on the historical performance of a portfolio of similar Prosper loans.

Estimated Returns: Lender yield minus estimated loss rate. This does not factor in late fees or uncollected accrued interest on defaulted loans. 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.