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LendingRobot co-founders Gilad Golan and Emmanuel Marot.

In an attempt to improve the peer-to-peer lending process, LendingRobot today announced that it has raised a $3 million Series A round led by Runa Capital.

LendingRobot uses machine-learning algorithms to help investors automatically track down the most valuable loans as soon as they become available. The company was started by Gilad Golan and Emmanuel Marot, who first met at Microsoft and shared an interest in making personal Lending Club investments.

But while the co-founders loved the seven percent returns at low risk, having to spend hours in front of a computer to monitor new loan opportunities was cumbersome. That’s when Golan and Marot came up with the idea for LendingRobot and created software that helps investors automate their loan lending process and identify loans with the best return potential.

“We want to allow individual investors, of any size, to invest their money in online lending, in a way which is both simple, fast, and liquid,” Marot said.

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Peer-to-peer lending is gaining popularity, largely because the process eliminates banks who sit between borrowers and lenders. This results in lower rates for borrowers and higher returns for lenders.

But Golan and Marot also realized early on that it’s difficult for individual investors to compete with institutions and hedge fund managers, who often have their own sophisticated algorithms and are spending all day tracking new loans. LendingRobot is designed to help regular, everyday investors with its high-speed automation system that supports more than 40 different filtering criteria for Lending Club and Prosper Marketplace, two of the leading online lending platforms in the U.S.

LendingRobot-LogoMarot said his company, which has more than 1,000 users, is the only “professional” service for individual peer-to-peer investors.

“There are excellent service providers for Wall Street. For you and I, not so much,” he said. “So in terms of competition for us, it is a question of who will be investing ultimately — institutions, or people. Obviously, we’re on the ‘people’ side.”

Marot said it was important to raise venture capital money “because we think we’re on the verge of a revolution in finance.”

“Online lending makes a lot of sense and it’s nothing genius, really,” he noted. “It’s simply using Internet technologies to make a 600-year-old process way more efficient.”

As a result of the funding, Runa Capital partners Peter Bauert and Andre Bliznyuk will join the LendingRobot board.

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