Lending Club, Newly Launched P2P Lending Success Story, Secures$10.26 Million in Series A Financing
SUNNYVALE, CA – August 23, 2007 – Lending Club, the rapidly growing person-to-person lending service where people borrow and lend money among each other, bypass the banks, and get better rates, today announced that it received $10.26 million in Series A funding led by Canaan Partners and Norwest Venture Partners. Lending Club will use the funds to expand its person-to-person lending community beyond its initial Facebook® application.
“Lending Club has enjoyed significant early success with the Facebook launch in May, and we see great opportunity for the company to leverage its affinity focus,” said Jeff Crowe, general partner at Norwest Venture Partners, who will be joining Lending Club’s board. “Consumers borrow hundreds of billions of dollars every year at high interest rates, and the person-to-person lending market has tremendous potential. With its focus on quality-lending relationships, Lending Club is well positioned to be a leader in this space.”
Since its May 24, 2007, launch on Facebook, the Lending Club community has reached more than 13,000 Facebook users and $750,000 in loans have been transacted among those users.
“The multi-billion dollar consumer lending market is just beginning to leverage the power of social networks,” said Dan Ciporin, a venture partner at Canaan, who will also be joining Lending Club’s board. “Credit card companies have had enormous success over the years using affinity relationships as a platform for lending growth. Lending Club is taking this model to the next level while making it more consumer-friendly: the company uses connections among people to help them lend and borrow money among each other at better rates. With its success on Facebook already demonstrating the power of affinity relationships in consumer lending, we are excited to help Lending Club expand this market disrupting model and increase its business success.”
Lending Club is available to individual borrowers with credit scores at or above 640. Using Lending Club, borrowers can apply for personal loans of $500 to $25,000 to be funded by individual lenders. To date lenders have funded 80 percent of all loan requests. Lending Club handles user authentication, bank account verification, credit checking, credit reporting, funds transfers and collections.
Lending Club’s proprietary technology, LendingMatch, helps lenders quickly identify the best loans based on pre-set criteria such as credit worthiness, being friends on Facebook, sharing network affiliations, belonging to the same groups or by geographical location. LendingMatch instantly presents lenders with a diversified loan portfolio (composed of ten to thirty borrowers) reflecting these relationships as well as the lenders’ individual risk preferences.
“Lending Club has demonstrated on Facebook that person-to-person lending can efficiently leverage connections among people. We are now ready to expand beyond Facebook to leverage other types of professional and social connections,” said Renaud Laplanche, CEO and founder of Lending Club. “Canaan Partners and Norwest Venture Partners bring a wealth of collective expertise in financial services and digital media that will help the company take P2P lending mainstream.”