August 2007 Market Survey

Going forward Prosper's People-to-People Lending Market Survey will be released on the second Tuesday of every month. To register to automatically receive the survey, send an email with "SUBSCRIBE" in the subject line to: p2plendingmarketsurvey@prosper.com.

Membership and Loan Volume Statistics

	August 2007	August 2006	2007 Year-to-Date	Since Inception
New Members	30,623	12,825	270,866	408,633
Funded Loans	$6.6 million	$3.9 million	$56.6 million	$85.0 million
Average Loan Size	$6,733	$5,080	$6,969	$6,037
Daily Average Number of Borrower Listings	2,575	1,173	2,202	1,366

Estimated Annual Return on Prosper Select Index

	August 2007
Prosper Select Index	10.31%
Prime Select Index	9.41%
Near Prime Select Index	10.73%
Sub Prime Select Index	14.95%

Average Borrower Rates on Prosper Select Loans

	August 2007	July 2007	August 2006	2007 Year-to-Date	Since Inception
Prime Select Loans	10.15%	10.29%	11.64%	10.03%	10.14%
Near Prime Select Loans	16.83%	17.08%	16.25%	15.90%	16.06%
Sub Prime Select Loans	25.88%	22.13%	28.72%	23.30%	23.89%

Mix of Funded Borrowers

	August 2007	August 2006	2007 Year-to-Date	Since Inception
Prime	32%	26%	30%	28%
Near Prime	59%	49%	57%	54%
Sub Prime	9%	25%	14%	18%

Noteworthy

Top Five Prosper Borrower States in August 2007

1. California
2. Georgia
3. Illinois
4. Ohio
5. Florida

Market Commentary by Chris Larsen, Co-Founder and Chief Executive Officer of Prosper

The market turmoil stemming from the ongoing credit crunch, subprime mortgage meltdown and housing value slump naturally begs questions about what impact this market environment is having on the Prosper marketplace. In a nutshell, we would categorize the impact as broadly constructive for Prosper lenders and prime and near prime borrowers.

As consumers are being hit with the evaporation of introductory credit card rate offers and home equity loan options, Prosper is becoming an even more attractive financing alternative, particularly for more creditworthy borrowers.

At the same time, lenders on Prosper are exhibiting rational behavior by steering their bids toward borrowers in the higher credit categories and being far more cautious about chasing higher rates offered by subprime borrowers. Evidence of this flight to safety is seen in Prosper's mix of funded borrowers. For example, the subprime category accounted for only 9 percent of loans funded in August 2007, a marked decrease from August 2006 and the 2007 year-to-date average of 25 percent and 14 percent, respectively.

What remains to be seen is whether lenders on Prosper will start placing less weight on homeownership as a factor in their bidding strategies. It is possible that we may begin to see evidence of this trend given that in our most recent defaulted loan sale the debt buyer placed zero value on homeownership across all credit categories – a highly unusual shift away from placing value on what is typically considered Americans' largest asset.

Definitions

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

Since Inception: November 1, 2005 through August 31, 2007. 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.

Prosper Select Index: The Prosper Select Index return is the estimated average annual return on invested 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 August 31, 2007. 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. Rates shown are interest rates, not annual percentage rates.

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