US person-to-person (P2P) network Lending Club has raised $12 million in a series b funding round led by Morgenthaler Ventures.
Morgenthaler principal Rebecca Lynn will join Lending Club's board of directors. Existing investors, Norwest Venture Partners and Canaan Partners also participated in the round.
Says Lynn: "We were attracted to Lending Club because it offers a compelling proposition in any market, but especially in today's environment. Borrower members find much-needed relief in a tight credit environment, and lender members have earned an average annual return of 9.05% over the last 20 months, which is better than most investment alternatives."
"This additional capital will allow us to continue to expand our capabilities and accelerate the growth of our customer base," adds Renaud Laplanche, CEO and founder, Lending Club.
The firm has also added former E*Trade and MarketTools staffer Pamela Kramer as chief marketing officer.
Lending Club launched in Facebook in May 2007 before securing $10.26 million in a series a funding round a few months later to enable it to move out of the social network with the launch of its own site.
However, in May 2008 it was forced to stop accepting new loans and lender registrations on its platform while it registered its business with securities authorities. The site received the green light from the SEC in October.
Rival platforms Prosper and Loanio have also been forced to shut their doors while they register with the SEC. In December Prosper had to pay $1 million to regulators to resolve a probe into the sale of unregistered securities over the site.