Prosper.com, one of the first websites for peer-to-peer lending, announced today that it has raised another $1 million in funding.
That’s a relatively small amount compared to the $41 million that the San Francisco company has raised in all, but the new money is also noteworthy because it comes from Nigel W. Morris, co-founder of Capital One, a major credit card and banking company. (Prosper shared the investment size with us, even though it’s not in the press release linked above.) Morris made the investment through his firm QED Investors, and is joining Prosper’s board of directors.
Companies like Prosper allow individuals to make loans to each other online. Users post requests for loans of between $1,000 and $25,000, with the maximum interest rate they’re willing to pay, as well as the personal history behind the loan. Then lenders can bid on the loans. As part of efforts for greater financial oversight, federal regulators shut down peer-to-peer lending sites last fall, but Prosper reopened earlier this year, and now says its marketplace has 870,000 loans.
Competitor Lending Club raised $12 million in March, and has raised more than $22 million in all.