More Strong Growth at Prosper With $146 Million in New Loans in June

Prosper Jun 2014

Prosper ended the second quarter very strongly with $146 million in new loans in June, up from $124 million in May. The total loan volume for the second quarter was a very impressive $370 million up from just $73 million in the second quarter of 2013.

The three month moving average (the black line in the chart above) continues to steepen. Prosper’s growth has been very strong the past four months.

Prosper is Now Running at Break-even

I had my regular end of month chat with Aaron Vermut, CEO of Prosper, yesterday and we covered a number of topics. There have been many interesting developments at Prosper lately:

  1. Prosper made a profit in May for the first time and while the June books are not final, as of this writing he expected the quarter to be close to break-even. Interestingly, he said that Prosper is not making a big deal out of this milestone. The plan is to operate close to break-even for some time as they continue to invest more money into the business.
  2. They have been hiring a lot of people lately. In the last 90 days they received over 2,000 resumes for open positions, they made 30 job offers and 28 people accepted their offer. The total head count is now around 125 people.
  3. They are making a big push with their mobile strategy – this includes a mobile-optimized website, apps for borrowers and investors as well as an app focused on credit education for borrowers.
  4. Automated Quick Invest (AQI) is being rewritten so that it will use the same engine as the API – this will be a big benefit for investors because today AQI is simply not that effective in finding loans.
  5. Prosper is making a big customer service push. They want to be known as the Zappos of personal finance. At their call center, which is based locally, their goal is to answer every call within 20 seconds.

Below are some of the stats from loans issued in June. The average loan size is slightly lower than last month, the average dollars issued per day is at an all time high and most of the other stats have remained relatively steady.

Average loan size: $13,007
Average dollars issued per business day: $7.3 million
Percentage 36/60 month loans: 64.6%/35.4%
Average interest rate: 15.17%
Percentage of whole loans: 88.5%
Average FICO score: 699

Note: If you are wondering about the Lending Club numbers they have unfortunately stopped updating their new loan data. Their origination numbers and new loan data for the second quarter will be available around the middle of August.

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LonghornSF
LonghornSF
Jul. 1, 2014 10:16 pm

So impressed with what those guys have done. Taking a business on the verge of collapse and growing volume 10x in a little over a year. I wonder how they industry would have played out if the current management team was in place when Lending Club came along.

Rob L
Rob L
Jul. 2, 2014 5:38 am
Reply to  LonghornSF

They do seem to have their act together. I recently opened an IRA account and am transfering a fairly substantial amount of cash into it to get started. Guess that says I’m convinced.

Chris
Chris
Jul. 4, 2014 10:59 pm
Reply to  Peter Renton

Yeah, this pretty much has me convinced that Ripple is going to fail. If you don’t know what I mean, research where Chris Larsen moved onto after his foray in Prosper.

James Jaeschke
Jul. 6, 2014 10:46 pm

Interesting that they are rewriting things using the API. I ran some tests using my app against their autoinvesting and was able to beat the AQI. Take a look at https://www.simpleyield.com/ if you are an android user and want to give things a try.

johnny
johnny
Jul. 8, 2014 11:54 am

I really hope they work on the quality of customer service, I don’t really care as much about how quickly they pick up as in the quality of service they provide. The two times I called in the agents did not sound very confident in their answers. So far most of my interactions with customer no service have been less then satisfactory. When I send a question in the responses are very delayed responses, when I get an email I will respond to that individual customer service rep and it goes back and forth and then they won’t respond back to my emails, I keep saying not solved yet help haha. So I’ve had to submit a new ticket or call in.

I love the product so far and still happy with it, I just think they really need to look at the quality of the customer service and hold the agents accountable when they stop responding, provide some coaching ect.

Thanks for all you tips and advice Peter! its really helped me improve my returns!

Bill Walker
Bill Walker
Jul. 9, 2014 6:58 pm
Reply to  johnny

Johnny,

I manage Customer Experience for Prosper and am disappointed to hear that you have found our service to take much longer than expected and, in some instances, to be lacking in confidence.

If you are open to it I would like to grab a few minutes of your time to get some more specifics so that I can provide coaching to specific agents you may have interacted with along with identifying training opportunities for our entire operation.

My e-mail is bwalker@prosper.com if you are open to setting up a quick conversation.

Best Regards,
Bill Walker
VP: Customer Experience

Johnny
Johnny
Jul. 10, 2014 12:19 am
Reply to  Bill Walker

Hey Bill,

Thanks for taking the time to reply, I will email you directly.

Thanks