After a tough year for the online lending market and a change of CEOs, peer-to-peer marketplace Prosper has secured a deal with a consortium of investors for up to $5bn worth of loans.
The consortium is made up of affiliates of each of New Residential Investment, Jefferies Group and Third Point, as well as an entity of which Soros Fund Management serves as principal investment manager.
The group of institutional investors will purchase the $5bn in loans over the next 24 months with the consortium also gaining an equity stake in the San Francisco-based lender.
The size of it’s stake will depend on the amount of loans purchased.
Warehouse financing of up to $1bn will also be supplied by a syndicate of lenders including Credit Suisse, Deutsche Bank, Goldman Sachs and Morgan Stanley.
Prosper’s CEO David Kimball said: “We’re very pleased to be working with this consortium of investors, and believe they will be great long-term partners as we continue to build a large-scale business.
“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.”
Kimball took over from former CEO Aaron Vermut in November 2016 following a difficult year for many players in the online lending space.
Prosper’s marketplace saw loan originations worth $311.8m in total for Q3 2016, down 71% on the same period a year previous.
The company is yet to announce its fourth quarter results but claims it portfolio of loans generated an estimated net return of 7.86% for its institutional and individual investors in January.
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