A big round for a company that originally started out as a Facebook app: peer lending network operator Lending Club has secured a $24.5 million Series C financing round led by Foundation Capital and joined by existing investors including Morgenthaler Ventures, Norwest Venture Partners and Canaan Partners.
This brings the total of capital injected into the company to $52.7 million.
Lending Club says the additional funding will be used to further develop its platform, which brings together lenders and borrowers who want to cut out banks in the process of investing among peers. Lending Club says it will also use the extra money to launch new products, improve customer service and expand sales and marketing efforts.
The company hasn’t had it easy over the past few years. In April 2008, it put a hold on lending activities because of regulatory issues, and ultimately filed for SEC registration during the summer of that year. Then, the economy collapsed and Lending Club along with other P2P lenders were heavily affected. One of its main rivals, Zopa, hightailed it out of the U.S. market not long after.
According to a press release issued by the company earlier this morning, Lending Club has now managed to capture 79% of the US peer lending market in March 2010 with a whopping $8,664,750 (PDF) in monthly loan originations.
Its biggest competitor is Prosper, which has also raised tens of millions of dollars (and is reportedly raising some more).
Lending Club brings together investors with creditworthy borrowers, reducing the cost and complexity of traditional lending to offer borrowers better rates and investors better returns. Focusing on prime and super-prime quality borrowers enables Lending Club to provide investors with steady returns, even during the economic downturn. Lending Club Notes have provided investors with a Net Annualized Return by grade between 5.73% for A grade Notes and 11.56% for G grade Notes. Creditworthy borrowers can borrow up to $35,000 with...
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