Prosper Originates $595.6M in Q2

Prosper Marketplace’s Q2 loan originations of $595.6M was down 33% from the same period last year and down more than 5% from Q1 2023. The company attributed the decline to “reduced investor demand given the current uncertain economic environment.”

Investor demand is a major driver for Prosper which sells whole loans to institutional investors and notes to retail investors. The 33% YoY decrease is even more significant considering that it actually represents a 50% drop in the raw number of loans made.

Prosper generated a $52.7M net loss in Q2 on just $31.5M in net revenue.$32M worth of expenses, however, were attributed to “Change in Fair Value of Convertible Preferred Stock Warrants.”

“There was also a $8.1 million decrease in Total Net Revenues from Change in Fair Value of Financial Instruments, Net, due primarily to higher delinquencies and charge-offs for loans held in consolidated warehouse trusts and the Credit Card portfolio underlying the Credit Card Derivative, both of which have increased in size from the prior year,” the company wrote. “Additionally, higher interest rates have led to negative fair value adjustments on Loans Held for Sale.”