Funding Circle Raises 1.1M to do P2C Lending

London based Funding Circle has announced that it has raised 1.1 million US$ form undisclosed private investors and will launch it’s p2c lending service Fundingcircle.com in Q2 2010.

Director and co-founder James Meekings informed P2P-Banking.com:

When the platform launches later this year, people will lend small amounts to a range of different, creditworthy businesses to spread their risk. In turn, those businesses will be borrowing from a multitude of people to get a lower interest rate. … Funding Circle will also empower people to support their local community, by allowing lenders to target businesses with characteristics, such as locale, that are valued by them.

Small businesses will initially be able to apply for unsecured loans of 5,000 to 50,000 GBP. The businesses are checked for fraud and must meet a number of minimum credit requirements verified by the UK’s leading credit agency. Experienced underwriters then further analyse and screen businesses before allowing them onto the Funding Circle platform.

CommunityLend Announces $1 Million Investment by Stone & Co

CommunityLend Holdings Inc., the parent company of Canadian p2p lending service CommunityLend Inc., announced a 1 million CAN$ investment through a convertible debenture from from Stone & Co. Limited Flagship Stock Fund Canada (“Stone”). As part of their investment, Mr. Richard Stone, Founder and CEO of Stone, will join CommunityLend’s Board in an observer role.

Michael Garrity, Co-Founder and CEO of CommunityLend Inc, said:

… When CommunityLend launches in the next few weeks, we intend to remove these obstacles through the introduction of Canada’s only peer-to-peer lending system, a new lending model which removes the middleman in lending transactions by allowing borrowers the ability to connect directly with lenders through a safe and secure online lending system. …

MYC4 Reduces Staff Due to Lack of Capital

MYC4 has redefined it’s strategy and budget plans after it was unable to attract new funding from business angels as originally planned. Mads Kjaer, CEO and main shareholder has announced that he will invest 1.4 million Euro (approx. 2.1M US$) into the company in 2010. To reduces costs MYC4’s management has decided to conduct a collective termination of all employees’ contracts on Monday November 30 in order to renegotiate employment with all employees and give them the possibility of deciding what to do in the current situation with a three-month notice period.

Some employees have already decided to stay on board, just as the CEO and deputy CEO yesterday had their terminations withdrawn by the Board of Directors, which means that MYC4 will continue under the management of Mads Kjaer and Svend Toettrup.

For MYC4 2009 was an extremely difficult year as default rates of the loans of nearly all local providers peaked. Volume of new loans slowed to about a quarter of the high reached in mid-2008 as several providers were paused to evaluate/clear the situation.

The conflict with Ebony Capital Ltd., a provider in Kenya, reached new extremes. The legal battle led to a search of Ebony’s premises by the Criminal Investigation Department, Nairobi on Dec. 1st.

Furthermore MYC4 placed information adverts in a regional newspaper to encourage borrowers to make repayments on their loans directly to a MYC4 account instead to Ebony Capital Ltd. (picture of newspaper ad).

MYC4 even set up an information page directed at Ebony borrowers and linked it on its home page.

Given the circumstances 2010 will not be an easy year for MYC4, too.

P2P Lending Company Prosper.com has High Q3 Loss

Prosper Marketplace, Inc. the company running the p2p lending site Prosper.com had a net loss of 2,238,138 US$ in the third quarter of 2009. Furthermore Prosper’s cash reserve is low. As of September 30th, 2009 Prosper had 2,079,624 US$ cash and cash equivalents left from an initial VC funding of 40 million US$. Even accounting for the recent 1 million US$ investment of a banker, at the current burn rate Prosper will need new funding soon.

However the timing and circumstances make chances for a new VC round look less than ideal.
Prosper reopened the site for new loans after completing the SEC registration process in July 2009, but still struggles to reach growth rates the marketplace had in 2007 and 2008.

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Banker Invests 1 Million US$ VC Money into Prosper

Nigel Morris, co-founder of Capital One, has invested 1 million US$ into Prosper.com via his venture capital company QED Investors.

The investment comes in form of a convertible promissory note for the amount of 1 million US$, which is due in one year and carries an interest rate of 15%. QED Investors may elect to convert the note into shares of Prosper’s preferred stock.

VC funding for Prosper now totals 41 million US$. Nigel Morris joins Prosper’s board of directors.

(via TechCrunch.com, sources press release & other)