Prosper.com - Series E financing analysis

A few days ago, Prosper.com received another venture capital investment.

Investors paid $0.739/share, a slightly higher price than last year's round, but still far far lower than the $9.692/share Prosper raised in 2007.

Here's a quick history of Prosper's venture capital.

04/2005, Series A, 4,023,999 shares for $7,464,450, or $1.875 per share.
02/2006, Series B, 3,310,382 shares for $12,412,301 or $3.776 per share.
06/2007, Series C, 2,063,448 shares for $19,919,009 or $9.692 per share.
04/2010, Series D, 20,340,705 shares for $14,700,000 or $0.723 per share.
06/2011, Series E, 23,222,747 shares for $17,150,000 or $0.739 per share.

Prosper paid an agent $375,000 to raise this money. If we subtract that commission out of the $17,150,000, then Prosper received net $0.722/share for this round.

In recent months, Prosper has been burning (losing) about $1 Million/month. (For example, see the Prosper 10Q filing for the quarter ending 3/31/2011, and leave out the nonrecurring items, such as insurance recoveries. They lost about $3 Million for the quarter.) Prosper's future depends on reducing that burn, eventually breaking even and then becoming profitable. My guess is that with fresh money in hand, they may initially increase the burn rate, as they put money to use for various marketing programs to try to drive the loan origination rate up.

As always, great discussion among P2P and Prosper.com lenders is found on prospers.org. I hope to see you there!