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Prosper, the service that makes it easy for users to lend and borrow money from each other, has secured a third round of financing, raising $20 million. Companies that participated in the financing were DAG Ventures Meritech Capital Partners, as well as previous investors: Accel Partners and Benchmark Capital.
On Prosper, users bid for loans in a system similar to eBay's auctions. Users who want to lend money can set the minimum interest rate and bid in increments of $50 to $25,000 on loan listings of their choice. The company claims to have $70 million in loan transactions from 330,000 users.
The other competitors in this space are UK-based Zopa, as well as recently launched Facebook application LendingClub which we've covered in our recent roundup of Facebook apps.