Prosper Progress: Online Lender Reports Strong Q2 Growth, Closes $500 Million Securitization

Prosper Marketplace, a leading marketplace lending platform, has reported improved numbers for the second quarter.  Prosper has shared that it generated positive operating cash flow for the quarter and originations rocketed up 74% year over year.

Prosper said they experienced strong demand for its personal loan product during the quarter. Prosper facilitated $775 million in loan originations, up 32% quarter-over-quarter and 74% year-over-year. The company also grew transaction fee revenue 32% quarter-over-quarter and 84% year-over-year.

“We are very pleased with our second quarter results which demonstrate our ability to generate positive operating cash flow as we grow loan originations and transaction revenue with disciplined expense management,” said David Kimball, CEO, Prosper Marketplace. “Our growth was driven by strong interest from borrowers, our partnership with a consortium of investors, and innovations from our talented team.”

The positive report comes at a time where Prosper is said to be raising capital to boost its balance sheet. Prosper has also been trimming costs. An improving market for the online lender should help with any potential negotiations. Prosper announced $5 billion in backing for their loans at the beginning of the year that helped to steady the platform.

Prosper recently closed the second securitization from the Prosper Marketplace Issuance Trust, Series 2017-2, “PMIT 2017-2.”

Approximately $500 million of notes were issued for PMIT 2017-2 which were said to have priced at tighter levels versus the PMIT 2017-1 transaction that closed in May 2017.

Almost 45 different investors have now participated in the two securitization issued under the PMIT program. Credit Suisse Securities and Jefferies served as joint book runners on the transaction, The securitization was rated by Fitch Ratings, Inc. and Kroll Bond Rating Agency, Inc.

“With this second securitization, we continued to see strong demand for our assets, underscoring investors’ confidence in our business and this asset class in general,” said Usama Ashraf, CFO, Prosper Marketplace.

The following table summarizes the financial highlights from the quarter:

Key Operating and Financial Metrics (Unaudited)
(in thousands)

  Three Months Ended June 30,
  2017 2016
Loan Originations $           774,700 $        445,300
Transaction Fees, Net 35,423 19,276
Servicing Fees, Net 6,793 7,676
Net Loss (41,405) (35,628)
Adjusted EBITDA(1) 6,716 (11,619)
Net Cash Provided by (Used in) Operating Activities 8,579 (18,341)


Summary of Key Financial Highlights for Prosper during the quarter:

  • Prosper facilitated $775 million in loan originations through its platform, up 32% quarter-over-quarter and 74% year-over-year driven by strong demand for its personal loan product.
  • Transaction fee revenue rose to $35.4 million, up 32% quarter-over-quarter and 84% year-over-year.
  • The company reported a Net Loss of $41.4 million in the second quarter of 2017, which included $39.3 million in non-cash charges related to warrants to purchase preferred stock that were issued to a consortium of investors, and a third party in connection with a settlement agreement.
  • Prosper generated $8.6 million of Net Cash from Operating Activities and Adjusted EBITDA of $6.7 million in the second quarter of 2017, driven by an increase in origination volume, improved marketing efficiencies and lower general and administrative expenses.