July 2008 Prosper People-to-People Lending Market Survey

Purpose of Personal Loan Listings and Fundings

Borrowers who post listings in the Prosper marketplace are asked how they intend to use their personal loan. The following reflects borrowers’ statements of intended use of loan proceeds with regard to both listings and loans. Prosper does not verify or confirm after funding how loan proceeds are used.

Definitions

Since Inception: November 1, 2005 through July 31, 2008. Prosper’s by invitation only “friends and family” launch began on November 1, 2005 and Prosper launched to the general public on February 13, 2006.

2008 Year-to-Date: January 1, 2008 through July 31, 2008.

2007 Year-to-Date: January 1, 2007 through July 31, 2007.

Prosper Select Index: The Prosper Select Index return is the estimated average annual return on principal, based on actual delinquency performance to date. The Prosper Select Index includes AA - E credit grade loans for borrowers whose credit reports at the time of application indicated zero current delinquencies, three or fewer credit inquiries, and a debt-to-income ratio of 40 percent or less. The annual return period reflects loans originated in the twelve month period ending one month prior to the observation date of July 31, 2008. Prime Select includes AA and A credit grade loans (credit scores of 720+). Near Prime Select includes B, C, D credit grade loans (credit scores between 600 and 719). Sub Prime Select includes E credit grade loans (credit scores between 560 and 599).

Average Borrower Rates: Average Borrower Rates are the weighted average borrower rates on Prosper Select Index loans with loan amounts between $5,000 and $10,000. Rates shown are interest rates, not annual percentage rates.

Mix of Funded Borrowers: Prime includes all AA and A credit grade loans (credit scores of 720+). Near Prime includes all B, C, D credit grade loans (credit scores between 600 and 719). Sub Prime includes all E and HR credit grade loans (credit scores below 600).

N/A: Not available; no loans met these criteria.

Series C Financing led by DAG Ventures and Meritech Capital Partners

SAN FRANCISCO–(BUSINESS WIRE)–Prosper (www.prosper.com), America’s first people-to-people lending marketplace, today announced the closing of a $20 million Series C financing round led by DAG Ventures and Meritech Capital Partners with participation by existing investors: Accel Partners, Benchmark Capital, Fidelity Ventures and Omidyar Network. This financing brings the total amount of capital raised by Prosper to $40 million.

“Prosper is well positioned to capitalize on a tremendous market opportunity,” said Paul Madera, Managing Director of Meritech Capital Partners. “Prosper has the team, technology, and long-term drive to transform the multi-billion dollar consumer lending industry.”

“An enormous market opportunity combined with a terrific business model is a recipe for success,” said John Cadeddu of DAG Ventures. “We think Prosper has both of these ingredients. But more importantly, we believe Prosper has the team to build an enduring, leading company.”

“We are appreciative of our new and early investors for their support and commitment,” said Chris Larsen, Co-founder and Chief Executive Officer of Prosper. “This latest round of financing provides us with considerable resources toward maintaining our leadership position and continuing to rapidly grow the Prosper marketplace.”

Since launching in February 2006, Prosper’s membership has grown to over 330,000 individuals with $70 million in loans funded in the Prosper marketplace. To find out more about Prosper, visit www.prosper.com.