P2P Lending Company Prosper Marketplace (Prosper.com) has hired Nick Talwar, former head of Citibank Sweden. Talwar’s task as Chief Revenue Officer will be to bring Prosper back on a growth track.
As reported earlier Prosper is currently experiencing high losses and struggling to reconnect with earlier growth rates.
In October Smava Poland (Smava.pl) entered a cooperation with Euro Finanse, an independent vendor of financial products and services. Smava says the cooperation already yields very positive results. The first three weeks of cooperation brought a 50% growth in loan volume.
Euro Finanse was selected as partner due to it’s sales strength and presence not only in the large cities but with 450 financial consultants throughout the country, says CEO PrzemysÅ‚aw Moscicki.
Apart from sales activities the consultants can handle additional tasks like verifying identities of borrowers in person and validating income statements.
To my knowledge Smava.pl is the first p2p lending company to use an offline sales channel to sell the service.
Prosper Marketplace, Inc. the company running the p2p lending site Prosper.com had a net loss of 2,238,138 US$ in the third quarter of 2009. Furthermore Prosper’s cash reserve is low. As of September 30th, 2009 Prosper had 2,079,624 US$ cash and cash equivalents left from an initial VC funding of 40 million US$. Even accounting for the recent 1 million US$ investment of a banker, at the current burn rate Prosper will need new funding soon.
However the timing and circumstances make chances for a new VC round look less than ideal.
Prosper reopened the site for new loans after completing the SEC registration process in July 2009, but still struggles to reach growth rates the marketplace had in 2007 and 2008.
Virgin Money has been a facilitator of friends and family p2p loans in the US. The last official number on loan volume generated was 390 million US$. Virgin Money had aquired predecessor Circlelending in 2007. In the article Virgin Money Letting US Business Fade Away, P2PLending News.com now lists several signs that Virgin Money might exit the p2p lending market.
Nigel Morris, co-founder of Capital One, has invested 1 million US$ into Prosper.com via his venture capital company QED Investors.
The investment comes in form of a convertible promissory note for the amount of 1 million US$, which is due in one year and carries an interest rate of 15%. QED Investors may elect to convert the note into shares of Prosper’s preferred stock.
VC funding for Prosper now totals 41 million US$. Nigel Morris joins Prosper’s board of directors.
(via TechCrunch.com, sources press release & other)
Prosper has published a review of the results of a legal collection test. In November 2007, Prosper had selected 74 loans with an outstanding principal balance of approx. 704,000 US$ to conduct a test for a legal collection strategy instead of including them in a debt sale (which at that time was the usual Prosper procedure for bad debt).
The cases were handed over to the law firm Hunt & Henriques.
Since then there was none or little official communication about the progress. Relying on other sources, P2P-Banking.com reported last year that several of lawsuits in these cases were lost.
The new blog post by Prosper describes in detail which steps were undertaken and what results the measures yielded. The only step that can be counted as somewhat successful was the pre-legal phase of letters threatening lawsuits which recovered about 40,000 US$ payments. 66 accounts then went into the legal process.
Surprisingly 16 cases (24%) had to be closed because the debtor moved out of state (3) or Prosper was unable to obtain service.
On a sidenote: Interested parties have raised the questions why Prosper did not apply to the court to allow service by publication, which seem to legal and often used in California as P2P-Banking.com was told. In this case, after other measures failed the plaintiff runs an classified ad in a newspaper. It does not matter if the defendant actually sees this newspaper ad.
The remaining 50 cases further dwindled when Prosper deducted cases with bankruptcies and lowered credit scores which it deemed not worthwhile. Continue reading