Prosper Discovers Black Friday Is Not Only for Shopping

SAN FRANCISCO--(BUSINESS WIRE)--Prosper.com, the world’s largest peer-to-peer lending marketplace with over one million members and $211 million in funded loans, today announced that lender bidding activity on the site surged 350% on Black Friday.

“The increased activity on Black Friday shows that people are looking to make every dollar go even further, whether purchasing a holiday gift or making an investment”

“The increased activity on Black Friday shows that people are looking to make every dollar go even further, whether purchasing a holiday gift or making an investment,” said Chris Larsen, chief executive officer and co-founder of Prosper.com. “As investors look to make their money work harder in 2011, peer-to-peer lending is becoming an increasingly appealing asset class for a broader range of investors.”

In addition to the Black Friday surge, Prosper also reported strong average returns relative to other asset classes and other peer-to-peer lending sites. In October, Prosper originated loans with a 10.69% estimated return. Furthermore, according to independent website LendStats.com, which tracks the peer-to-peer lending industry based on publicly available data, lenders on Prosper are realizing average returns of at least three percentage points higher than on other P2P lending sites.*

“The findings by LendStats.com further validate that the new risk management measures we put in place more than a year ago have resulted in an overall improvement in loan performance,” Larsen added.

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*Based on loan originations from August 2009 through December 2009.

Prosper Statistics for October 2010:


Prosper Rating	Borrower Rate	Lender Yield	Expected Annual Loss Rate	Expected Annual Return	Average Loan Amount	Loan Volume	% of Funded Loans
AA	8.11%	7.11%	1.48%	5.63%	$8,401	$352,826	14%
A	10.87%	9.87%	3.43%	6.44%	$7,589	$235,250	9%
B	14.63%	13.63%	5.69%	7.94%	$8,167	$645,169	26%
C	23.29%	22.29%	8.49%	13.79%	$10,464	$115,100	5%
D	27.07%	26.07%	10.51%	15.56%	$4,532	$571,092	23%
E	33.14%	32.14%	14.20%	17.94%	$4,208	$269,328	11%
HR	32.14%	31.14%	22.10%	9.04%	$2,953	$315,950	13%
All Funded Loans	20.79%	19.79%	9.10%	10.69%	$5,340	$2,504,715	100%

Prosper Peer-to-Peer Borrower Loan Purpose


		Funded Loans
Debt Consolidation		55%
Home Improvement		10%
Business Use		12%
Auto / Vehicle		4%
Other Use		18%

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.

Expected Annual Loss Rate and Expected Annual Return: Expected 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 of October, 2010. Expected Annual Return is calculated by subtracting the Expected Annual Loss Rate for those loans from the corresponding Lender Yield. The Expected Annual Loss Rate is the estimated principal loss on charge-offs for loans originated during October, and is based on the historical performance of Prosper loans for borrowers with similar characteristics. Expected Annual Loss Rate does not include estimated accrued interest not collected or estimated late fees. The calculation of Expected Annual Return and Expected Annual Loss Rate requires 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 Prosper

Prosper Marketplace Inc. is the world's largest peer-to-peer lending marketplace with over one million members and more than $211 million in funded loans.

Prosper allows people to invest in each other in a way that is financially and socially rewarding. On Prosper, people list and bid on loans using an online auction platform. Borrowers list loan requests between $1,000 and $25,000 and set the maximum rate they are willing to pay. Individual and institutional investors bid 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. Once the auction ends, Prosper handles the funding and 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 $57.7 million in venture capital and is backed by financial and technology luminaries including, Jim Breyer of Accel Partners; Bob Kagle of Benchmark Capital; CompuCredit; Omidyar Network; Capital One Co-founder Nigel Morris of QED Investors; Court Coursey of TomorrowVentures; and Larry Cheng of Volition Capital.

Notes offered by Prospectus.