Prosper Marketplace, a pioneering online lender that has struggled as of late, announced a deal Monday that could provide as much as $5 billion in loan funding over the next two years.
Under the agreement, a consortium of institutional investors will receive an equity stake in the San Francisco company based on the volume of loans they purchase, Prosper said in a press release.
Members of the consortium include affiliates of New Residential Investment Corp., Jefferies Group and Third Point.
“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 CEO David Kimball said in the press release.
Kimball became chief executive in November after the resignation of CEO Aaron Vermut. The company originated $311.8 million in loans in the third quarter of 2016, down 71% from a year earlier. The company has not yet reported its fourth-quarter results.
Prosper uses an online platform to match borrowers – often consumers seeking to consolidate credit card debt – with individual savers, hedge funds and other investors.