Peer-to-peer lending sites are hot again among investors of all stripes. Lending Club today announced a new $25 million Series D financing, led by Union Square Ventures (with existing investors participating). The funding comes on the heels of a $17 million round Eric Schmidt and DFJ put into competitor Prosper in June.
The P2P lending industry has recovered from a few years ago when the SEC forced all the major players to shut down for a few months because they weren’t properly registered/. Lending Club was the first to go through that transition, and the first to come out of it.
Fast-forward to today, and Lending Club is originating more loans than its nearest competitor, Prosper. In July, Lending Club generated $20.6 million in new loans, compared to $6 million for Prosper. Both are growing rapidly, however. Lending Club has reached new record loan numbers in 7 of the past 8 months, according to Peter Renton of the Social Lending Network (see chart). P2P lending sites allow individuals to lend to each other. But institutional money has been flowing into these markets, attracted by the higher interest rates.
The latest funding, brings Lending Club’s total capital raised to $78 million, with the last round being at a similar $24.5 million in May of 2010.