CommunityLend Raises $2.5M

Community LendSocial lending is coming to Canada. Founded more than a year ago by Michael Garrity and Colin Henderson and following the successful model of Zopa in the UK and Prosper in the U.S., CommunityLend will be launching a P2P lending service in Canada.

P2P lending works like this. Borrowers provide their details to CommunityLend, including a public profile and reason for the loan. CommunityLend performs a credit check on the borrowers and then posts the borrower’s story, profile and credit rating to a community of prospective lenders/investors in an eBay-like interface. Investors then bid on pieces of the loan (each loan is typically divided up among many lenders which mitigates everyone’s risk). After the bidding process the loan is then issued at the minimum rate required to satisfy enough lenders to fund the full amount.

The company will be offering, at first, one standard type of loan – 3 years, fixed rates to a maximum of 25k. Judging by other services like Prosper.com, social lending seems to fill a gap in the product offering of a traditional bank. Rates are typically in the 10-18% range, which fits above bank rates for unsecured lines of credit and below that of high interest credit cards. CommunityLend makes money by charging a small spread to both the borrower and the lender.

With the current “sub-prime” troubles in global credit markets, the timing may be perfect for CommunityLend. Banks in Canada and the US have been tightening their credit policies making borrowing more difficult, especially for marginal creditors. The transparent, market-based P2P model may well prove to be a solution than can judge and price loans in this segment better than the big institutions.

In addition to the funding announcement (of mostly non-Canadian investment dollars btw), CommunityLend is also announcing a new slate of directors including Barry Campbell, former MP and Secretary to the Minister of Finance and Jim Jones CEO of GMAC Residential Capital [100B lending portfolio].

Congratulations to the team for reaching this milestone. We look forward to providing a more thorough review of the lending service once it goes live (we’re told early to mid next year).

For the time being you can get more info at the company’s newly launched website: CommunityLend.com.

StartupCamp Waterloo – February 26, 2008

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StartupCamp Waterloo is set for February 26th, 2008 at the Accelerator Center in Waterloo. They are sticking to the original format, which is the DemoCamp style pitch and feedback setup.

Signups for StartupCamp Waterloo are being handled here on the wiki. I think it would be great to see some out of town startups coming out to support what is going on in Waterloo. There is a great group of people in Waterloo who are working hard to build a startup community there. Mic Berman, Jesse Rogers and Simon Woodside organized the first StartupCamp there a few month ago and have come out to a few Toronto events.

Looking forward to seeing everyone there!

Blognation Shuts Down

Blognation finally folded today. I have no idea which side of the story is true and which parts are false, but it doesn’t really matter. I won’t link back to all the posts, there would be too many to go back and find.

Tris Hussey has been blogging at ca.blognation.com since April (I believe — I can’t seem to tell from the site). Tris has done a fantastic job of covering Canadian tech startups and has given us especially great coverage of West Coast startups. He has also scooped us on a few great stories.

I am bummed that Tris won’t be blogging about Canadian startups for the next while at least. Canada is losing out on this one, for now at least. It was the editors/writers of Blognation who got the worst end of the deal.

Tris has posted that he is looking for full time work, specifically as a community manager. I have heard from a few companies recently that are looking to hire someone in the same type of position, so I am pretty sure that it won’t take long for Tris to land on his feet, considering his depth of experience in building communities and in the blogging tools space.