Prosper Lost A Whopping $119 Million in 2016

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Prosper MarketplaceProsper might be the online lender for the who’s who of Wall Street these days, but the company still lost $119 million in 2016. To add perspective, Prosper only had $136 million in revenue for the year, meaning that for every dollar it earned it spent almost two. The loss was also more than 4x greater than the loss in 2015 even though the company earned significantly less revenue in 2016.

Year Revenue Profit (Loss)
2012 $7.6M ($16.0M)
2013 $18.3M ($27.0M)
2014 $81.3M ($2.6M)
2015 $204.2M ($26.0M)
2016 $136.0M ($118.7M)

General and Administrative was the largest line item expense at $102.7M, which consisted mainly of employee compensation. The second largest expense was Sales and Marketing at $70.1M.

The company originated more than $2.2 billion in loans for the year, down from $3.7 billion last year.

“The decrease in originations we experienced during the year ended December 31, 2016 were primarily driven by a number of our largest investors pausing or significantly reducing their purchases of Borrower Loans beginning in the second quarter of the year,” their earnings report said. “We believe these investors have paused or reduced their investment activity because of an increase in their cost of capital; negative actions and publicity at competitors; and our limited use of investor rebates, which have become more prevalent in the industry.”

To try and correct course, Prosper offered to sell up to 35% of their company to a consortium of Wall Street’s elite who have the right to buy up to $5 billion of their loans over the next 2 years.

See their full 10-K here

Last modified: May 7, 2017

Category: Industry News, Marketplace Lending

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