Prosper
Chris Larsen, co-founder and CEO
Headquarters: San Francisco
Founded: February, 2006
Funding: $20 million in venture capital from Accel Partners, Benchmark Capital, Fidelity Ventures, and Omidyar Network
Two of the unlikeliest success stories of late have been MySpace, purchased by News Corp. for $580 million in 2005, and microcredit, a practice that gained worldwide attention after its pioneer, Muhammad Yunus, was awarded the Nobel Peace Prize in 2006. The two concepts come together in Prosper, where people can avoid the high interest rates of banks and borrow and lend from one another in amounts as little as $25. In its first year of business, Prosper signed up some 140,000 members and oversaw about $32.5 million in loans.
Challenges: While Prosper has provided its lenders the means to identify and avoid deadbeat borrowers, with peer-to-peer lending there is still never a guarantee of repayment-a major hurdle for the company and rivals Zopa and Kiva.org.