Prism Adds Origination Services to Lending Platform for Tech Startups

Prism has added origination services to its lending platform tailored to startup tech companies and employees.

The company aims to help employees at startups access the equity that is locked up in private United States tech companies and has traditionally been inaccessible before an initial public listing (IPO) or acquisition, according to the press release.

The launch of the new origination services comes on the heels of Prism raising $26 million in combined seed and Series A fundraises, according to the release.

“Prism is ideally suited to today’s market: valuations have returned to attractive levels and startup workers are increasingly seeking new options to access the equity they’ve earned in their company without waiting years for an IPO,” Prism CEO and Co-founder Ari Stiegler said in the release. “Today’s launch and our robust capital raise reflect the growing demand for our lending platform that we’ve been hearing from startup leaders, employees and investors alike.”

Prism works directly with pre-IPO companies, focuses on tech companies with valuations of at least $1 billion, maintains strict underwriting processes and offers competitive rates, according to the press release.

The firm has already signed multiple agreements to begin originating loans, the release said.

“Lending is a symbiotic relationship between borrower and lender,” Prism Co-founder and Chief Operating Officer Noah Friedman said in the release. “Now that private valuations have begun to normalize, Prism can offer a valuable product that is a win-win for both sides of the equation.”

The global market for IPOs has been struggling, with companies having $19.7 billion via IPOs — a figure that is down 70% year over year and the lowest comparable level since 2019.

The largest drop happened in the United States, where companies have raised just $3.2 billion amid troubles in the banking sector and uncertainty around interest rates.

Global mergers and acquisitions (M&A) volumes are down too, having dropped by 48% year over year in the first quarter.

As of March 30, M&A volumes for the quarter were down by 70% in Europe, 44% in the U.S. and 29% in Asia Pacific.

With this decline, M&A activity slowed to its lowest level in more than 10 years amid rising interest rates, high inflation, geopolitical tensions, fears of a recession and the banking crisis.