US

Lendingclub receives 10 million VC funding

wiseclerk

Lendingclub has received a 10.26 million US$ venture capital investment from Norwest Venture Partners and Canaan Partners. The CEO Renaud Laplanche announced that the money will be used to expand Lendingclub beyond the Facebook platform.

In an interview, Daniel Ciporin of Canaan Partners says:

P2P services and functionality in general has been at the heart of web market disruption, from Ebay to MySpace to Facebook, using only a few of the most prominent examples. I think the opportunity is ripe now to apply P2P functionality in the consumer lending space, especially with the particular focus on pre-existing affiliations that Lending Club has.

Average lending club interest rate 11%

wiseclerk

Lendingclub's loan volume has surpassed 750000 US$. So far the average interest rate is 11.10%. As you can see in the table the majority of loans went to borrowers with good credit grades.

Lendingclub states that the top states where Florida, New York and Massachusetts. This differs from the state distribution of the Prosper loans, where California, Texas and Georgia are the states with most loans.
A possible cause is that Lendingclub.com is only open to Facebook users and might therefore target different user demographics then Prosper.com. (Source)

Open rebellion of lenders in Prosper forums

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Note: Most of the following is an observation of lenders opinions voiced in the Prosper forums (with sources given). The opinions voiced in the cited threads are the opinions of the individual lenders who posted them.

Looking into the lender section at the Prosper.com forums part of the posting lenders seem to be in open rebellion. Titles of threads from the last two days include "FLASH:Prosper bans $100.000 lender", "Prosper Mng. Living Under a Rock", "Shooting the Messenger", "What happens if Prosper goes under?", "I am done lending on Prosper", "Hello Prosper Moderator", "Lender's WHO are DONE with Prosper", "My letter to Prosper", "Open letter to John Witchel" 

Topics include lack of communication from prosper, failure to adress process problems, banning lenders, closing threads, … .

Posts call for "Class Action Lawsuit", informing Venture Capital firms who funded Prosper about the situation as the lenders posting see it and the call for withrawing funds.

One main cause for the unrest are the low ROIs large long term lenders are experiencing. This post says there are 203 lenders which have loans over 6 month old and more the 25K invested. For these the post says the average estimated ROI is 1.91%.

The result is that some long time lenders churn Prosper.com and stopped investing, while new lenders continue to pour in money.

As the following chart shows the count of lenders who have bid within the last 30 days stalls since April. 


(Source)

A few lenders now express their very legative opinion on Prosper prominently in their signature in every post they make in the Prosper forums. Example

As lenders have started to make fun of Prosper employees or using avatars to create the appearance of beeing a prosper moderator without any apparent reaction of Prosper in their own forums, users start to speculate if Prosper will be forced to close the forums to avoid the negative publicity.