Peer-to-peer lending gets another ($25M) shot in the arm

Prosper, a platform that connects borrowers with private investors who want to lend dough has just revealed another multimillion-dollar fundraising round of $25 million, nine months after capturing $20 million in funding.

“At a fundamental level, it makes so much sense. There’s so much inefficiency in the traditional bank model,” Pat Grady, a partner at the venture capital firm Sequoia told the New York Times.

Most of Prosper’s loans go to debt restructuring, but a handful of real estate startups have similar crowdfunded loan models including Realty Mogul, RealtyShares, Equidy and Fundrise that allow individuals to invest in portions of real estate projects.

An implementation of a section of the Jumpstart Our Business Startups Act that went into effect this week, making it easier for crowdfunders to advertise their services to potential investors.

Source: New York Times