Prosper’s Top Concern in 2018 is Liquidity, CEO Says

EXCLUSIVE— Marketplace lender Prosper will make liquidity a top priority as the company moves into 2018, company CEO David Kimball said during a lending conference that took place last week.

“Our main concern… it’s always liquidity, and I think most people in this room understand that the best way to get to liquidity is to have a lot of different options,” Kimball said to attendees of the Investors Conference in Marketplace Lending on Friday, December 1st. “And so I think you’ll see our toolkit expand [in 2018] versus where it is now.”

This focus on liquidity comes after a series of valleys and peaks for the lender, which was not immune to the struggles that plagued the industry during 2017. Even recently, most would have put Prosper in the “deathwatch category,” Kimball, who graduated from Prosper CFO to CEO in December 2016, admitted to conference attendees.

The company was able to push itself out of that category, unlike some others in the field who might be inching closer to the list, through a focus on investors and the success of its new securitization platform, Kimball said. The company has had three securitization transactions on the platform thus far, with “47 unique investors, $1.5 billion out there,” Kimball said.

The new focus also enabled the marketplace to become cash flow positive “for the first time in Prosper’s history” in the second quarter of 2017, Kimball said, a feat that the company repeated in the third quarter of the year.

A positive cash flow has made a real difference to the lender’s circumstances, Kimball told attendees.

“To be cash flow-positive, certainly as an investor you want to make sure that the servicer is going to be solvent, is going to be around, which is why everyone was concerned before,” Kimball said. “And to be in a position where you’ve got people buying your loans, you’ve got a securitization platform, that you’re able to generate cash, it just puts you in a vastly different situation.”

In 2018, Prosper will continue this focus on liquidity and new expansions, Kimball said. The company will also take a fresh look at its retail platform, a feature that provides the lender with a key advantage, according to Kimball.

“There’s only one other platform out there like us: we’re peer to peer, original peer-to-peer, so we do have a retail platform and that’s something that’s critically important to us, and it’s something that we have not invested as much as we should so that’s certainly a play for us,” Kimball said.

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