Prosper reports $26M loss despite spike in lending
Prosper Marketplace recorded a big jump in loan originations during the third quarter, but the San Francisco-based online lender still racked up $26.9 million in losses.
The privately held firm has lost $210 million since the start of 2016, in spite of various cost-cutting measures. In July, Prosper announced plans to discontinue a personal finance app that it acquired in 2015.
Other online lenders have also been struggling to become profitable.
LendingClub, which competes with Prosper in consumer lending, has posted more than $200 million in losses over the last six quarters. OnDeck Capital, which specializes in small-business loans, has reported losses in eight consecutive quarters.
Prosper would have earned a narrow profit in the third quarter if not for $28.1 million in charges related to warrants to purchase stock that were issued in connection with a settlement agreement.
The company originated $821.8 million in loans during the quarter. That figure was up from $311.8 million in the same period a year earlier, and also up from $774.7 million during the second quarter of 2017.
“We continued to see growth during the third quarter as people turned to Prosper’s personal loan product to refinance high-interest debt, pay for medical expenses, and finance home improvement projects,” Prosper CEO David Kimball said in a press release.
Last month, Prosper raised $50 million in capital, which the firm plans to use to make strategic investments in its platform and products. That deal reportedly valued Prosper at $550 million, down from a $1.9 billion valuation in 2015.