E-mail
del.icio.us
Technorati
DiggWhen Facebook Inc. opened up its application programming interface, or API, so that developers could start making software programs for the social network, venture capitalists smelled opportunity, and now those developers are smelling deals.
On Thursday, Lending Club Corp., a person-to-person lending service developed for the Facebook online community, announced a $10.26 million in Series A funding led by Canaan Partners and Norwest Venture Partners. The financing, which will be used to expand the person-to-person lending community beyond its initial Facebook application, is the biggest VC round for a Facebook startup to date. The valuation of the deal actually dwarfs that of the rumor (false, so far) of TripAdvisor LLC's buying the Facebook program “Where I’ve been” for $3 million.
Lending Club, which allows borrowers to bypass banks, and (hopefully) get better rates, will now compete with similar venture-backed startups Zopa Ltd. and Prosper Marketplace Inc., both of which raised more money than Lending Club this year. But Canaan and Norwest have good reason to believe Lending Club will be able to hold its own. It already has about 13,000 Facebook users who have transacted $750,000 in loans since the service's launch in May.
The big-picture trend is Facebook's emergence as a new type of incubator for Web 2.0 startups, where applications get to cut their teeth and prove their viability before seeking out venture money. Already, venture firms Bay Partners and Altura Ventures have set up funds dedicated to backing Facebook applications, and if Lending Club takes off outside Facebook the way it has inside the social network, we'll likely see more.
For more on the ways financial investors are affecting media companies in the Internet age, please join us at The Deal and Tech Confidential's Convergence 2.0 conference Sept. 17 in New York City. —George White
See The Deal's Aug. 23 story on Lending Club
See Aug. 17 post on Tripadvisor buying "Where have I been"
See July 10 VC Rating Post of Bay Partners' App Factory
See TheDeal.com’s June 20 story on Prosper Marketplace
See TheDeal.com’s March 19 story on Zopa
Tags: vc, venture+capital
Facebookster - We can provide a full range of facebook application strategy, design, development and marketing for your business. Our service offerings will allow you to maximize and leverage the facebook social graph of 32+ Million users.
We have been providing new media strategy, consulting and development for Fortune 100 Clients & Start-ups for several years. Our team of consultants, project managers and programmers are intimately familiar with the DNA of facebook and how to build an application that meets your business requirements.
www.facebookster.com or www.facebookster.net
Thanks for the coverage. We feel that we made the right move by launching on Facebook apps back on May 24th. We are rapidly closing in on $1 million in loans, and we have only been around since - May 24th.
Rex Dixon
Director of Social Media Content
Lending Club