Whoa, before you keep reading about the demise (or severe slowdown) of the online lending business, better take a look at this. Does $5B sound like a problem? Well, Prosper Marketplace just lined up that amount (yes, $5B) from a consortium of big name players. Congrats to our friend Ron Suber and Prosper.
Prosper Marketplace, a leading online consumer lending marketplace, today announced that it has closed a deal with a consortium of institutional investors to purchase up to $5 billion worth of loans through the Prosper platform over the next 24 months. The investors in the consortium are affiliates of each of New Residential Investment Corp., Jefferies Group LLC and Third Point LLC, and an entity of which Soros Fund Management LLC serves as principal investment manager. The consortium will also earn an equity stake in the company based on the amount of loans purchased, further aligning the group with Prosper’s future growth and success. Warehouse financing of up to $1 billion will be provided by a syndicate of lenders including Credit Suisse, Deutsche Bank, Goldman Sachs and Morgan Stanley.
“We’re very pleased to be working with this consortium of investors, and believe they will be great long-term partners as we continue to build a large-scale business,” said David Kimball, CEO, Prosper Marketplace. “This deal gives us the funding stability and additional capital markets expertise we need to continue to grow our marketplace and achieve profitability in 2017.”
Prosper has maintained positive momentum since the second half of 2016, with monthly loan originations growing steadily since July. In addition, the Prosper loan portfolio is delivering solid returns to its institutional and individual investors, with an estimated net return of 7.86%1 for January 2017. Prosper continues to diversify its investor base, and is focused on bringing new banks and other institutional investors onto the platform.
Financial Technology Partners (FT Partners) served as strategic advisor to Prosper Marketplace and its Board of Directors on this transaction. DV01 will be the loan data agent to the consortium.
About Prosper Marketplace
Prosper’s mission is to advance financial well-being. The company’s online lending platform connects people who want to borrow money with individuals and institutions that want to invest in consumer credit. Borrowers get access to affordable fixed-rate, fixed-term personal loans, and investors have the opportunity to earn attractive returns via a data-driven underwriting model. To date, over $8 billion in personal loans have been originated through the Prosper platform for debt consolidation and large purchases such as home improvement projects, medical expenses and special occasions.
Prosper launched in 2006 and is headquartered in San Francisco. The lending platform is owned by Prosper Funding LLC, a subsidiary of Prosper Marketplace. Loans originated through the Prosper marketplace are made by WebBank, member FDIC. Visit www.prosper.com and follow @Prosperloans to learn more. Prosper notes offered by Prospectus.
1 Estimated return on January 2017 production is 7.86% according to the Prosper Performance Update: January 2017