US P2P lending outfit Prosper has sold a convertible promissory note worth $1 million at 15% per annum interest to the venture capital firm run by Capital One co-founder Nigel Morris.
The company, which has previously raised $40 million in funding, says QED has now "invested" and Morris has also joined the board.
In an SEC Form 8-K filing, Prosper says the principal and accrued interest under the Note are due in a single payment on November 10, 2011. At this time, and for the next 90 days, QED can choose to convert the principal and accrued interest into shares of Prosper's preferred stock.
Prosper claims to be the largest peer-to-peer lending marketplace in the US with over $180 million in loans and 870,000 members.
However, the firm has had a difficult year, only resuming lending in July after being forced to close its doors to new loans last November in order to register its business with the SEC.
It now says the involvement of Morris - who co-founded credit card firm Capital One in 1994 - will boost growth efforts.
"To maximize and fast track our growth and revenue potential, we're honing our strategy to holistically approach marketing and risk modelling. Bringing in Nigel Morris and his team of operationally-oriented investors will immediately enhance our own team's analytical capability," says Chris Larsen, CEO, Prosper.