Company: Zopa
Description: Person to person online lending
Competitors: Prosper
Location: London
Amount Raised: $12.9 million
Round: Third
Date Announced: 3/19/07
VC Firms: Bessemer Venture Partners, Benchmark Capital, Wellington Management
VC Directors: Rob Stavis, Johann Brenner, Bart Markus
Quick Take: It's not as gutsy to rate later stage startups but P2P online lending is still not a sure thing. Zopa is going against conventional wisdom and raising more money to expand into the credit-hungry American market despite the fact it hasn't quite conquered its home market of England. Smart move. With its infrastructure in place, there's no reason to wait. If Zopa and its American competitor, Prosper, can attract enough liqudity in their marketplaces, they can both grow to be huge companies. That's what Benchmark, which has invested in both companies, is hoping for. The question is whether P2P lending can go mainstream. Zopa's move to provide lenders with an insurance option could help in that regard. For now, these sites aren't for the faint of heart. They resemble the desperate crowd you might find in a pawn shop. But, if banks won't give these borrowers a chance at a new start and cash advance companies charge too much, there's no reason Zopa and Prosper shouldn't succeed by filling the void.

Technology (1 out of 10): 4
Market: 5
Management: 8
Chances for IPO: 4
Overall VC Rating: 6

For more on Zopa, see:
Richard MacManus
Sam Sethi

Tags: zopa, bessemer, benchmark, wellington, vc, venture+capital