The deal - which also includes existing investor Foundation Capital among the buyers - values Lending Club at $1.55 billion, according to the New York Times, a nearly 300% rise from last summer when a $15 million funding round was closed.

An initial public offering could now be in the works for some time next year.

Google's vice president of corporate development, David Lawee, will take an observer seat on the Lending Club board alongside existing heavyweights Mary Meeker, John Mack and Larry Summers.

"Lending Club is using the Internet to reshape the financial system and profoundly transform the way people think of credit and investment. We are excited to be a part of it," says Lawee.

Lending Club launched in 2007, providing an online forum where potential borrowers and lenders can thrash out terms of a deal. Initially it operated within Facebook but soon broke out, claiming strong interest in its services.

However, the following year the start-up, and the entire nascent social lending industry, ran into regulatory trouble. Lending Club and rivals Prosper and Loanio were all forced to stop taking new loans and register with the SEC.

Since overcoming its initial regulatory problems, the company has grown strongly though and has now facilitated more than $1.65 billion in loans, $350 million in the last quarter.

The firm has also branched out through a wholly-owned subsidiary, LC Advisors, launching several funds in the last two years and now holding more than $450 million in assets under management.

It is not the only P2P marketplace picking up momentum - in January rival Prosper raised $20 million and appointed Wells Fargo bigwig Stephan Vermut as CEO.

Meanwhile, on the other side of the pond, the UK government, frustrated by high street banks' unwillingness to lend to small and medium sized businesses, is handing over millions of pounds to P2P outfits to distribute.