Peer-To-Peer Lending Marketplace Prosper Raises $20M From Sequoia, Eric Schmidt And Others; Brings On New CEO, a peer-to-peer lending marketplace in the U.S., has raised $20 million in new funding led by Sequoia, with the company’s existing investors, including Draper Fisher Jurvetson and Crosslink Capital, Accel Partners, CompuCredit, Omidyar Network, Eric Schmidt’s TomorrowVentures and Volition Capital, all participating. This brings the company’s total funding to $95 million. Sequoia Capital Partner Pat Grady will join the Prosper Board of Directors.

The company has also appointed Stephan Vermut, founder of Merlin Securities, as CEO and member of the board of directors. He will succeed Dawn Lepore, who had been the interim CEO of Prosper since March 2012.

It’s been a long road for Prosper, but the time may be right for peer-to-peer lending. Prosper pioneered the concept of people-to-people lending in the U.S with its launch in 2006. The startup hit a rough patch in 2008 when the SEC stopped all lending on the platform because the company didn’t register as a seller of securities. Peer-to-peer lending was a newly launched model, and with the then-new climate of heightened regulatory oversight in light of the financial meltdown, the SEC was being more judicious in its oversight of financial institutions.

The startup was able to re-launch its site in 2009 after the SEC gave Prosper the OK to facilitate peer-to-peer lending.

But as the SEC has now been open to new models of lending and investing, Prosper is perhaps on a new path. Over the past year, Prosper saw 100 percent growth in revenue and loan originations. Lepore has spent the past year focused on bringing borrowers, such as small businesses, onto the platform. Now Vermut has the task of bringing lenders onto Prosper. He’s the right guy to do the job, says Lepore, because of his 25 years of experience in the financial industry.

Vermut comes to Prosper from Wells Fargo, where he led the bank’s first foray into prime brokerage services. At Merlin Securities, Mr. Vermut and his team created a prime brokerage service based on technology that allowed for a customized approach to managing investment portfolios. Merlin Securities, which was also backed by Sequoia and had around $2 billion in assets, was acquired by Wells Fargo in early 2012. Vermut also spent 14 years at investment bank Bear Stearns.

Vermut explains that he’s focused on using the funds to bring new lenders to the platform, as well as for sales and marketing. He adds that he feels it’s a little early to be thinking about an IPO.

Prosper also announced it has named Ron Suber as head of Global Institutional Sales, and that Aaron Vermut will join as president after a transition period with Wells Fargo.

It’s interesting that Sequoia is investing late in the game for Prosper. But Grady maintains that when Prosper launched six years ago, their structures of the market didn’t support peer-to-peer lending. The state of the financial world is also different now, where banks are tightening the reins on lending and businesses are looking elsewhere for loans.

He adds that Sequoia is bullish on Vermut and his team, having seen him succeed at Merlin.

Of course, Prosper faces competition from the other leader in the peer-to-peer lending space, Lending Club. But Grady doesn’t see this as a zero-sum game, and says that customers will need several marketplaces.