Lending Club raises $10.26 for social lending — joins crowded field
Lending Club, the Sunnyvale, Calif. lending service where people borrow and lend money among each other, bypassing the banks, and theoretically getting better rates, said it has raised $10.26 million in a first round of financing.
Canaan Partners and Norwest Venture Partners made the investment.
The deal makes the the social lending industry very crowded, and the funding is a large amount for such a young company with little track record — especially when there’s so much competition (see our coverage). Prosper and Zopa both do something similar, and have raised much more cash. CircleLending, Wonga and GlobeFunder are other players (see coverage here).
However, Lending Club was first to build an application on Facebook, which it says has more than 13,000 Facebook users. It says $750,000 in loans have been made. It wants to use the money to expand beyond Facebook.
Lending Club’s investors say the market is still in its earliest stages: “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.”
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, the company says.
The company says it uses pre-set criteria such as credit worthiness, being friends on Facebook, sharing network affiliations, belonging to the same groups or by geographical location.
Next Story: PlayboyU, powered by Ning, for college students only
Previous Story: Greentech roundup: Phoenix Motorcars, Lockyer's $3.5B solar plan, Photowatt and more
About the Author, Matt Marshall
Matt launched VentureBeat in September of 2006, with the realization that no one else was covering the entrepreneurial and tech innovation scene with the velocity or depth that he was. Prior to founding VentureBeat, he covered venture capital for the San Jose Mercury News from 2001 to 2006. In 2002, Matt was awarded "Journalist of the Year" by the Northern California Society of Professional Journalists. Prior to working at the Merc, he was a correspondent for the Wall Street Journal in Bonn, Germany from 1995 to 1998, and a writer for the Washington Post in 1994. Matt holds a PhD in Government and an MA in German and European Studies from Georgetown University. In addition to VentureBeat, Matt is also the Executive Producer of DEMO, the leading launchpad event for emerging technologies.
