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Prosper

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Estimated Value: < $50 million

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Business: A person-to-person lending website where users can bid to lend or borrow money via auction.

Location: San Francisco, CA

More Info: About Prosper

CEO: Chris Larsen

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Investors: Accel Partners, Fidelity Ventures, Benchmark Capital, Omidyear Network

Analysis: Started in 2006, Prosper is a cross between Ebay and Facebook for people who need money. The loans are small, $25,000 tops. Research firm Celent projects peer-to-peer lending to reach $5.8 billion in 2010.

The negatives: Prosper's traffic has been flat for a year (per Compete), as has been the growth of funded loans. We assume the credit crunch is hitting Prosper hard (we can't imagine lending money through a web site to strapped consumers in this environment, and we imagine others have similar concerns).

If Prosper's issues are just economic, the company will be fine, but it's possible that the web-based P2P lending concept won't really take off. Our understanding of micro-lending's success in India and other countries is that the person-to-person relationships are important, and those may be hard to mimick online.

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Prosper generates revenue from a one-time 1%-3% fee on funded loans from borrowers, and a 0%-1% per annum loan-servicing fee to lenders. Prosper says it has facilitated $128.8 million in funded loans to date. Assuming a 3% cut (combining both commission and servicing fees), we estimate that Prosper's revenue to date is only about $4 million.

In the current environment, we estimate that Prosper would sell for less than $50 million.

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