Lending Club, Newly Launched P2P Lending Success Story, Secures $10.26 Million in Series A Financing

Thursday Aug 23, 12:21 PM PDT

Canaan Partners and Norwest Venture Partners Lead Funding of Affinity-based Person-to-Person Lending Company

SUNNYVALE, Calif., Aug. 23 /PRNewswire/ -- Lending Club (http://www.lendingclub.com), the rapidly growing person-to-person lending service where people borrow and lend money among each other, bypass the banks, and get better rates, today announced that it received $10.26 million in Series A funding led by Canaan Partners and Norwest Venture Partners. Lending Club will use the funds to expand its person-to-person lending community beyond its initial Facebook(R) application.

"Lending Club has enjoyed significant early success with the Facebook launch in May, and we see great opportunity for the company to leverage its affinity focus," said Jeff Crowe, general partner at Norwest Venture Partners, who will be joining Lending Club's board. "Consumers borrow hundreds of billions of dollars every year at high interest rates, and the person-to-person lending market has tremendous potential. With its focus on quality-lending relationships, Lending Club is well positioned to be a leader in this space."

Since its May 24, 2007, launch on Facebook, the Lending Club community has reached more than 13,000 Facebook users and $750,000 in loans have been transacted among those users.

"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, who will also be joining Lending Club's board. "Credit card companies have had enormous success over the years using affinity relationships as a platform for lending growth. Lending Club is taking this model to the next level while making it more consumer-friendly: the company uses connections among people to help them lend and borrow money among each other at better rates. With its success on Facebook already demonstrating the power of affinity relationships in consumer lending, we are excited to help Lending Club expand this market disrupting model and increase its business success."

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. Lending Club handles user authentication, bank account verification, credit checking, credit reporting, funds transfers and collections.

Lending Club's proprietary technology, LendingMatch, helps lenders quickly identify the best loans based on pre-set criteria such as credit worthiness, being friends on Facebook, sharing network affiliations, belonging to the same groups or by geographical location. LendingMatch instantly presents lenders with a diversified loan portfolio (composed of ten to thirty borrowers) reflecting these relationships as well as the lenders' individual risk preferences.

"Lending Club has demonstrated on Facebook that person-to-person lending can efficiently leverage connections among people. We are now ready to expand beyond Facebook to leverage other types of professional and social connections," said Renaud Laplanche, CEO and founder of Lending Club. "Canaan Partners and Norwest Venture Partners bring a wealth of collective expertise in financial services and digital media that will help the company take P2P lending mainstream."

About Lending Club

Lending Club(TM) is an online lending community where people can borrow and lend money among each other, bypass banks and get better rates. Members can borrow money more easily and at a better rate than they would get from a bank, or invest in a pool of loans at higher rates than those served by savings accounts or CDs. A proprietary technology called LendingMatch(TM) helps match lenders and borrowers by using connections established through social networks, associations and online communities, and build diversified portfolios based on lender preferences. Lending Club is headquartered in Sunnyvale, CA. More information is available at: http://www.lendingclub.com .

About Canaan Partners

Canaan Partners invests in visionary entrepreneurs and provides them the networks, insights and operational guidance required to build high-performance technology and healthcare companies. For 20 years, they have taken an active and committed role in the companies in which they invest, and have completed more than 67 mergers and acquisitions and 51 IPOs. With $2.3 billion under management and a worldwide footprint, the firm's technology team is committed to catalyzing the growth of innovative companies in the digital media, communications & mobility, enterprise and clean tech industries. Among its successes are DoubleClick, the leading online advertising solution, Match.com, the most popular online dating site in the world, and Acme Packet, one of the top ten performing IPOs of 2006. Other Canaan technology investments include SuccessFactors, The Active Network, Blurb, Dexterra, GroundWorks and ID Analytics. Canaan has offices in California, Connecticut, India and Israel. For more information visit: http://www.canaan.com.

About Norwest Venture Partners

Norwest Venture Partners (NVP) is a global venture capital firm that has partnered with entrepreneurs to build great businesses for more than 45 years. NVP focuses on investments in information technology including: consumer Internet and media, software, services, enterprise and communications systems, and semiconductor/components. The firm currently manages more than $2.5 billion in venture capital out of its office in Palo Alto, California.

NVP has funded over 400 companies since inception. Some of the firm's recent investments and transactions include Airespace (acquired by Cisco Systems), deCarta, mBlox, Resonext Communications (acquired by RF Micro Devices), Spinnaker Networks (acquired by Network Appliance), TURN, and Winphoria Networks (acquired by Motorola). NVP has also funded such market leaders as Actel Corporation, Cerent (acquired by Cisco Systems), Documentum, Extreme Networks, Forte Software (acquired by Sun Microsystems), PeopleSoft and Tivoli Systems (acquired by IBM). For more information, please visit: http://www.nvp.com

Lending Club

CONTACT: Paula Cavagnaro of Antenna Group, +1-415-977-1915, paula@antennagroup.com, Lending Club for Lending Club

Web site: http://www.lendingclub.com/
http://www.canaan.com/
http://www.nvp.com/

Source: Lending Club

Press Release retrieved from InfoWorld: IT Product Guide