Alternative Finances

Online Lender Prosper Has Lost 70 Percent Of Its Value

Prosper Marketplace lending

It’s been a tough 12 months for online lending marketplace Prosper.

The firm announced Friday that it has raised another $50 million in funding — but that that funding has come at the cost of a sharp devaluation for the once-unicorn status firm.

At its last valuation, Prosper’s net worth was estimated to be around $1.9 billion — after its latest round of funding, that figure has fallen all the way to $550 million, according to internal sources. That $50 million is also rather less than Prosper raised in its last two rounds in 2014 and 2015.

Despite the hit, Prosper’s CEO remains positive.

“This investment is a strong signal of confidence in our business fundamentals and the momentum we are seeing right now,” said David Kimball, the CEO of Prosper, in a statement. “Over the past year, we’ve shown that we can build a sustainable business that continues to redefine the online lending experience for our borrowers and investors. We believe this partnership will open up additional opportunities for our business as we continue to grow.”

Despite difficulties, the firm also noted that it managed to bring in $775 million in loans last quarter and that transaction fees were increasing. The company said it had also recently streamlined operations and cut expenses to generate $8.6 million of net cash from operating activities last quarter.

Prosper isn’t alone in the lending marketplace difficulties these days — Lending Club has struggled most prominently since its difficulties were kicked off with a scandal. But Prosper, like Lending Club, made a CEO switch of late — and also had to purge a full 30 percent of its staff.

The new investor in Prosper will be LPG Capital, according to a person with inside knowledge.

Previous backers include Sequoia Capital, Draper Fisher Jurvetson and Francisco Partners.

The down round does not come as a full shock — news of it leaked this summer in The Information.


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