May 25th, 2007

LendingClub, a new person-to-person lending site based in Sunnyvale, CA, launched during last night’s Facebook f8 event in San Francisco. LendingClub, headed by founder and CEO Renaud Laplanche, has raised $2 million in angel funding, and has about 18 employees.

For the moment, the site is only accessible through Facebook, but will eventually be available to the public.

LendingClub is unique in that it leverages Facebook’s 50M+ users and their social connectedness to give lenders more confidence in making loans to those who might be connected to them through a college network, the region they live in, or a company. Unlike a traditional social network, however, LendingClub will never disclose the actual names or profiles of borrowers and lenders to each other.

LendingClub seems to have taken a lot of cues from US first-mover Prosper, although there are some notable differences:

• LendingClub requires a minimum credit score of 640 (Prosper’s minimum is 540)
• LendingClub seems to calculate the rates that borrowers will borrow at, and lenders will lend at. For example, if you are in the D2 “loan grade”, you can get a loan at 12.17%.
• Lenders, similarly, do not compete for loans in an auction format - they are simply offered loans at certain rates, and they decide to take them or leave them.
• LendingClub has a highly simplified process for lending your money called “LendingMatch”. It asks the lender for the amount to lend, his or her tolerance for risk, and offers a portfolio of loans that meet the lender’s criteria, taking into account any social connections that the lender might have with any borrowers whose loans are available for purchase.