Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 15, 2020 | Jun. 30, 2019 | |
Entity Information [Line Items] | |||
Document Period End Date | Dec. 31, 2019 | ||
Entity File Number | 333-225797-01 | ||
Entity Registrant Name | PROSPER MARKETPLACE, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Address, Address Line One | 221 Main Street | ||
Entity Address, Address Line Two | 3rd Floor | ||
Entity Address, City or Town | San Francisco | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 94105 | ||
City Area Code | 415 | ||
Local Phone Number | 593-5400 | ||
Entity Tax Identification Number | 73-1733867 | ||
Entity Well-known Seasoned Issuer | No | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 68,455,641 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity Public Float | $ 0 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001416265 | ||
Prosper Funding LLC | |||
Entity Information [Line Items] | |||
Entity File Number | 333-225797 | ||
Entity Registrant Name | PROSPER FUNDING LLC | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Address, Address Line One | 221 Main Street | ||
Entity Address, Address Line Two | 3rd Floor | ||
Entity Address, City or Town | San Francisco | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 94105 | ||
City Area Code | 415 | ||
Local Phone Number | 593-5479 | ||
Entity Tax Identification Number | 45-4526070 | ||
Entity Well-known Seasoned Issuer | No | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 0 | ||
Entity Public Float | $ 0 | ||
Entity Central Index Key | 0001542574 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | ||
ASSETS | ||||
Cash and Cash Equivalents | $ 64,635 | $ 57,945 | ||
Restricted cash | [1] | 155,773 | 149,114 | |
Available for Sale Investments | 0 | 22,173 | ||
Accounts Receivable | [1] | 1,695 | 5,119 | |
Loans Held for Sale, at Fair Value | [1] | 142,026 | 183,788 | |
Borrower Loans, at Fair Value | 634,019 | [1] | 263,522 | |
Property and Equipment, Net | 31,296 | |||
Property and Equipment, Net | 15,273 | |||
Prepaid and Other Assets | [1] | 5,694 | 4,643 | |
Servicing Assets | 12,602 | 14,687 | ||
Goodwill | 36,368 | 36,368 | ||
Intangible Assets, Net | 720 | 999 | ||
Total Assets | 1,084,828 | 753,631 | ||
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT | ||||
Accounts Payable and Accrued Liabilities | 19,937 | 19,967 | ||
Payable to Investors | 101,092 | 127,538 | ||
Notes, at Fair Value | 244,171 | 264,003 | ||
Notes issued by securitization trust | [1] | 347,662 | 0 | |
Certificates Issued by Securitization Trust, at Fair value | [1] | 52,168 | 0 | |
Warehouse Lines | [1] | 131,583 | 162,488 | |
Convertible Preferred Stock Warrant Liability | 149,996 | 143,679 | ||
Other Liabilities | 21,726 | 10,629 | ||
Total Liabilities | 1,068,335 | 728,304 | ||
Commitments and Contingencies (see Note 18) | ||||
Convertible preferred stock | 322,748 | 323,793 | ||
Stockholders' Deficit | ||||
Common stock | 208 | 229 | ||
Additional Paid-In Capital | 151,416 | 145,486 | ||
Less: Treasury Stock | (23,417) | (23,417) | ||
Accumulated Deficit | (434,462) | (420,751) | ||
Accumulated Other Comprehensive Loss | 0 | (13) | ||
Total Stockholders' Deficit | (306,255) | (298,466) | ||
Total Liabilities, Convertible Preferred Stock and Stockholders' Deficit | 1,084,828 | 753,631 | ||
Prosper Funding LLC | ||||
ASSETS | ||||
Cash and Cash Equivalents | 7,462 | 11,163 | ||
Restricted cash | 110,399 | 136,018 | ||
Borrower Loans, at Fair Value | 245,137 | 263,522 | ||
Property and Equipment, Net | 7,549 | 6,426 | ||
Servicing Assets | 14,888 | 15,550 | ||
Other Assets | 749 | 323 | ||
Total Assets | 386,184 | 433,002 | ||
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT | ||||
Accounts Payable and Accrued Liabilities | 2,133 | 4,690 | ||
Payable to Related Party | 2,679 | 1,283 | ||
Payable to Investors | 105,287 | 127,253 | ||
Notes, at Fair Value | 244,171 | 264,003 | ||
Other Liabilities | 3,727 | 4,528 | ||
Total Liabilities | 357,997 | 401,757 | ||
Stockholders' Deficit | ||||
Member's Equity | 15,904 | 24,904 | ||
Accumulated Deficit | 12,283 | 6,341 | ||
Total Stockholders' Deficit | 28,187 | 31,245 | ||
Total Liabilities, Convertible Preferred Stock and Stockholders' Deficit | 386,184 | 433,002 | ||
Variable Interest Entity, Primary Beneficiary | ||||
ASSETS | ||||
Restricted cash | [2] | 39,118 | 0 | |
Accounts Receivable | [2] | 73 | 3,902 | |
Loans Held for Sale, at Fair Value | [2] | 142,026 | 183,788 | |
Borrower Loans, at Fair Value | [2] | 388,882 | 0 | |
Prepaid and Other Assets | [2] | 2,928 | 1,393 | |
Total Assets | [2] | 573,027 | 189,083 | |
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT | ||||
Notes issued by securitization trust | [2] | 347,662 | 0 | |
Certificates Issued by Securitization Trust, at Fair value | [2] | 52,168 | 0 | |
Warehouse Lines | [2] | 131,583 | 162,488 | |
Total Liabilities | [2] | $ 531,413 | $ 162,488 | |
[1] | (1) Includes amounts in consolidated variable interest entities (VIEs) presented separately in the table below. | |||
[2] | The following table presents the assets and liabilities of consolidated variable interest entities (VIEs), which are included in the Consolidated Balance Sheets above. The assets in the table below may only be used to settle obligations of consolidated VIEs and are in excess of those obligations. Additionally, the assets and liabilities in the table below include third-party assets and liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. See N ote 7 - Securitizations and Note 11 - Debt, to Notes to Consolidated Financial Statements for add itional information. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Sep. 20, 2017 |
Statement of Financial Position [Abstract] | |||
Convertible preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Convertible preferred stock, shares authorized (in shares) | 444,760,848 | 444,760,848 | |
Convertible preferred stock, shares issued (in shares) | 209,613,570 | 214,637,925 | |
Convertible preferred stock, shares outstanding (in shares) | 209,613,570 | 214,637,925 | |
Convertible preferred stock, aggregate liquidation preference | $ 370,456 | $ 375,952 | |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 625,000,000 | 625,000,000 | 625,000,000 |
Common stock, shares issued (in shares) | 69,387,836 | 71,411,145 | |
Common stock, shares outstanding (in shares) | 68,451,901 | 70,475,210 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating Revenues | |||
Revenues | $ 142,034 | $ 97,926 | $ 113,495 |
Gain on Sale of Borrower Loans | 10,946 | 13,147 | 11,431 |
Fair Value of Warrants Vested on Sale of Borrower Loans | (17,553) | (72,316) | (60,122) |
Interest Income | |||
Interest Income on Borrower Loans and Loans Held for Sale | 100,786 | 57,716 | 47,208 |
Interest Expense on Financial Instruments | (63,736) | (45,886) | (43,954) |
Net Interest Income | 37,050 | 11,830 | 3,254 |
Change in Fair Value of Financial Instruments, Net | (25,514) | (5,395) | (514) |
Total Net Revenues | 153,570 | 104,361 | 116,235 |
EXPENSES | |||
Origination and Servicing | 34,915 | 35,116 | 34,881 |
Sales and Marketing | 73,824 | 77,997 | 83,462 |
General and Administrative | 71,588 | 72,371 | 75,686 |
Restructuring Charges, Net | 34 | 1,762 | 1,340 |
Change in Fair Value of Convertible Preferred Stock Warrants | (11,235) | (45,003) | 29,140 |
Other Expense (Income), Net | (1,945) | 1,891 | 7,392 |
Total Expenses | 167,181 | 144,134 | 231,901 |
Net Loss Before Income Taxes | (13,611) | (39,773) | (115,666) |
Income Tax Expense (Benefit) | 100 | 172 | (508) |
Net Income | $ (13,711) | $ (39,945) | $ (115,158) |
Net Loss Per Share – Basic and Diluted (in dollars per share) | $ (0.18) | $ (0.57) | $ (1.65) |
Weighted-Average Shares - Basic and Diluted (in shares) | 70,511,605 | 70,384,501 | 69,687,836 |
Prosper Funding LLC | |||
Operating Revenues | |||
Revenues | $ 71,283 | $ 75,895 | $ 78,942 |
Gain on Sale of Borrower Loans | (5,058) | (58,027) | (48,691) |
Interest Income | |||
Interest Income on Borrower Loans and Loans Held for Sale | 41,146 | 43,569 | 47,208 |
Interest Expense on Financial Instruments | (38,492) | (40,656) | (43,954) |
Net Interest Income | 2,654 | 2,913 | 3,254 |
Change in Fair Value of Financial Instruments, Net | (375) | (701) | (514) |
Total Net Revenues | 73,562 | 78,107 | 81,682 |
EXPENSES | |||
Administration Fee – Related Party | 62,575 | 70,491 | 70,359 |
Servicing | 5,012 | 6,140 | 6,103 |
General and Administrative | 33 | 597 | 379 |
Total Expenses | 67,620 | 77,228 | 76,841 |
Income Tax Expense (Benefit) | 0 | 0 | |
Net Income | 5,942 | 879 | 4,841 |
Transaction Fees, Net | |||
Operating Revenues | |||
Revenues | 119,282 | 123,373 | 130,174 |
Servicing Fees, Net | |||
Operating Revenues | |||
Revenues | 23,406 | 29,025 | 27,206 |
Servicing Fees, Net | Prosper Funding LLC | |||
Operating Revenues | |||
Revenues | 26,368 | 27,943 | 25,963 |
Other Revenues | |||
Operating Revenues | |||
Revenues | 5,953 | 4,697 | 4,806 |
Other Revenues | Prosper Funding LLC | |||
Operating Revenues | |||
Revenues | 155 | 270 | 170 |
Administration Fee Revenue – Related Party | Prosper Funding LLC | |||
Operating Revenues | |||
Revenues | $ 49,818 | $ 105,709 | $ 101,500 |
Consolidated Statements of Othe
Consolidated Statements of Other Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Net Income (Loss) | $ (13,711) | $ (39,945) | $ (115,158) |
Other Comprehensive Income (Loss) | |||
Change in Net Unrealized Gain (Loss) on Available for Sale Investments, at Fair Value | 13 | 60 | (74) |
Realized Gain on Sale of Available for Sale Investments, at Fair Value | 0 | 0 | 9 |
Other Comprehensive Income (Loss), Before Tax | 13 | 60 | (65) |
Income Tax Effect | 0 | 0 | 0 |
Other Comprehensive Income (Loss), Net of Tax | 13 | 60 | (65) |
Comprehensive Loss | $ (13,698) | $ (39,885) | $ (115,223) |
Consolidated Statements of Conv
Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Total | Common Stock | Convertible preferred stock issued and outstanding | Convertible Preferred Stock | Convertible Preferred StockConvertible preferred stock issued and outstanding | Common Stock | Common StockCommon Stock | Treasury Stock | Additional Paid-In Capital | Additional Paid-In CapitalCommon Stock | Additional Paid-In CapitalConvertible preferred stock issued and outstanding | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Prosper Funding LLC | Prosper Funding LLCMember’s Equity | Prosper Funding LLCAccumulated Deficit |
Balance at Dec. 31, 2016 | $ (164,873) | $ 275,938 | $ 212 | $ (23,417) | $ 123,988 | $ (8) | $ (265,648) | $ 31,325 | $ 30,704 | $ 621 | ||||||
Balance (in shares) at Dec. 31, 2016 | 177,388,425 | 75,084,344 | (5,177,235) | |||||||||||||
Entity Information [Line Items] | ||||||||||||||||
Issuance of convertible preferred stock | 0 | $ 47,855 | ||||||||||||||
Issuance of convertible preferred stock (in shares) | 37,249,497 | |||||||||||||||
Exercise of vested stock options | 103 | $ 6 | 97 | |||||||||||||
Exercise of vested stock options (in shares) | 606,284 | |||||||||||||||
Repurchase of restricted stock | $ 0 | |||||||||||||||
Repurchase of stock (in shares) | (266,130) | |||||||||||||||
Restricted stock vested | $ 41 | $ 10 | 31 | |||||||||||||
Exercise of warrants | 5 | 5 | ||||||||||||||
Exercise of warrants (in shares) | 43,736 | |||||||||||||||
Stock-based compensation expense | 12,532 | 12,532 | ||||||||||||||
Change in net unrealized loss on Available for Sale Investments, at Fair Value | (65) | (65) | ||||||||||||||
Net Income (Loss) | (115,158) | (115,158) | 4,841 | 0 | 4,841 | |||||||||||
Distributions to Parent | (5,800) | (5,800) | 0 | |||||||||||||
Balance at Dec. 31, 2017 | (267,415) | $ 323,793 | $ 228 | $ (23,417) | 136,653 | (73) | (380,806) | 30,366 | 24,904 | 5,462 | ||||||
Balance (in shares) at Dec. 31, 2017 | 214,637,925 | 75,468,234 | (5,177,235) | |||||||||||||
Entity Information [Line Items] | ||||||||||||||||
Exercise of vested stock options | 28 | $ 1 | 27 | |||||||||||||
Exercise of vested stock options (in shares) | 176,011 | |||||||||||||||
Restricted stock vested | 13 | 13 | ||||||||||||||
Exercise of warrants | 0 | |||||||||||||||
Exercise of warrants (in shares) | 8,200 | |||||||||||||||
Stock-based compensation expense | 8,793 | 8,793 | ||||||||||||||
Change in net unrealized loss on Available for Sale Investments, at Fair Value | 60 | 60 | ||||||||||||||
Net Income (Loss) | (39,945) | (39,945) | 879 | 0 | 879 | |||||||||||
Distributions to Parent | 0 | 0 | 0 | |||||||||||||
Balance at Dec. 31, 2018 | (298,466) | $ 323,793 | $ 229 | $ (23,417) | 145,486 | (13) | (420,751) | 31,245 | 24,904 | 6,341 | ||||||
Balance (in shares) at Dec. 31, 2018 | 214,637,925 | 75,652,445 | (5,177,235) | |||||||||||||
Entity Information [Line Items] | ||||||||||||||||
Exercise of vested stock options | 25 | $ 1 | 24 | |||||||||||||
Exercise of vested stock options (in shares) | 173,356 | |||||||||||||||
Repurchase of restricted stock | $ 0 | $ (1,045) | $ 1,045 | $ 22 | $ (22) | $ (1,045) | ||||||||||
Repurchase of stock (in shares) | (5,024,355) | (2,196,665) | ||||||||||||||
Exercise of warrants (in shares) | 3 | |||||||||||||||
Stock-based compensation expense | 4,839 | 4,839 | ||||||||||||||
Change in net unrealized loss on Available for Sale Investments, at Fair Value | 13 | 13 | ||||||||||||||
Net Income (Loss) | (13,711) | (13,711) | 5,942 | 0 | 5,942 | |||||||||||
Distributions to Parent | (9,000) | (9,000) | 0 | |||||||||||||
Balance at Dec. 31, 2019 | $ (306,255) | $ 322,748 | $ 208 | $ (23,417) | $ 151,416 | $ 0 | $ (434,462) | $ 28,187 | $ 15,904 | $ 12,283 | ||||||
Balance (in shares) at Dec. 31, 2019 | 209,613,570 | 73,629,136 | (5,177,235) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |||
Cash Flows from Operating Activities: | |||||
Net Income (Loss) | $ (13,711,000) | $ (39,945,000) | $ (115,158,000) | ||
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities: | |||||
Change in Fair Value of Financial Instruments, Net | 27,306,000 | 5,307,000 | 514,000 | ||
Depreciation and Amortization | 7,676,000 | 9,968,000 | 12,348,000 | ||
Amortization of Operating Lease Right-of-Use Asset | 3,494,000 | ||||
Gain on Sale of Borrower Loans | (11,924,000) | (13,171,000) | (14,138,000) | ||
Change in Fair Value of Servicing Rights | 12,476,000 | 13,148,000 | 12,074,000 | ||
Stock-Based Compensation Expense | 4,529,000 | 8,401,000 | 12,238,000 | ||
Restructuring Liability | 0 | 1,576,000 | 1,343,000 | ||
Fair Value of Warrants Vested on Sale of Borrower Loans | 17,552,000 | 72,317,000 | 61,605,000 | ||
Change in Fair Value of Convertible Preferred Stock Warrants | (11,235,000) | (45,004,000) | 29,140,000 | ||
Other, Net | 1,118,000 | (1,281,000) | 377,000 | ||
Impairment Losses on Assets Held for Sale | 0 | 0 | 6,399,000 | ||
Changes in Operating Assets and Liabilities: | |||||
Purchase of Loans Held for Sale at Fair Value | (2,320,560,000) | (2,365,431,000) | (2,619,130,000) | ||
Proceeds from Sales and Principal Payments of Loans Held for Sale at Fair Value | 2,241,569,000 | 2,178,498,000 | 2,619,709,000 | ||
Accounts Receivable | 3,424,000 | (4,435,000) | 74,000 | ||
Prepaid and Other Assets | 1,350,000 | 4,581,000 | (3,208,000) | ||
Accounts Payable and Accrued Liabilities | (106,000) | 7,566,000 | (2,268,000) | ||
Payable to Investors | (26,446,000) | (4,894,000) | (10,212,000) | ||
Other Liabilities | (4,590,000) | (3,683,000) | (2,496,000) | ||
Net Cash Used in Operating Activities | (68,078,000) | (176,482,000) | (10,789,000) | ||
Cash Flows from Investing Activities: | |||||
Purchase of Borrower Loans Held at Fair Value | (170,328,000) | (177,101,000) | (194,887,000) | ||
Principal Payments of Borrower Loans Held at Fair Value | 254,845,000 | 175,117,000 | 192,054,000 | ||
Purchases of Property and Equipment | (10,312,000) | (5,889,000) | (4,174,000) | ||
Maturities of Short Term Investments | 0 | 0 | 1,280,000 | ||
Purchases of Short Term Investments | 0 | 0 | (1,262,000) | ||
Purchases of Available for Sale Investments, at Fair Value | (1,488,000) | (23,266,000) | (68,297,000) | ||
Proceeds from Sale of Available for Sale Securities | 0 | 0 | 31,232,000 | ||
Maturities of Available for Sale Securities | 23,763,000 | 54,750,000 | 16,600,000 | ||
Net Cash Provided by (Used in) Investing Activities | 96,480,000 | 23,611,000 | (27,454,000) | ||
Cash Flows from Financing Activities: | |||||
Proceeds from Issuance of Notes Held at Fair Value | 171,138,000 | 176,830,000 | 194,391,000 | ||
Payments of Notes Held at Fair Value | (167,419,000) | (175,760,000) | (191,828,000) | ||
Principal Payments on Notes Issued by Securitization Trust | (134,250,000) | 0 | 0 | ||
Principal Payments on Certificate Issued by Securitization Trust | (13,770,000) | 0 | 0 | ||
Proceeds from Securitization Issuance | 8,962,000 | 0 | 0 | ||
Proceeds from Issuance of Convertible Preferred Stock, Net | 0 | 0 | 47,855,000 | ||
Proceeds from Warehouse Lines | 186,010,000 | 161,797,000 | 0 | ||
Principal payments on Warehouse Lines | (57,899,000) | 0 | 0 | ||
Payments of Debt Issuance Costs | (7,850,000) | (1,428,000) | 0 | ||
Proceeds from Exercise of Warrants and Stock Options | 25,000 | 28,000 | 123,000 | ||
Repurchase of Common Stock, Convertible Preferred Stock and Restricted Stock | 0 | 0 | (64,000) | ||
Taxes Paid for Awards Vested Under Equity Incentive Plans | 0 | 0 | (15,000) | ||
Net Cash (Used in) Provided by Financing Activities | (15,053,000) | 161,467,000 | 50,462,000 | ||
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash | 13,349,000 | 8,596,000 | 12,219,000 | ||
Cash, Cash Equivalents and Restricted Cash at Beginning of the Period | 207,059,000 | 198,463,000 | 186,244,000 | ||
Cash, Cash Equivalents and Restricted Cash at End of the Period | 220,408,000 | 207,059,000 | 198,463,000 | ||
Supplemental Disclosure of Cash Flow Information: | |||||
Cash paid for interest | 60,642,000 | 45,320,000 | 43,776,000 | ||
Non-Cash Investing Activity- Accrual for Property and Equipment, Net | 707,000 | 630,000 | 171,000 | ||
Non-Cash Investing Activity- Consolidation of Third Party Borrower Loans | (391,383,000) | 0 | 0 | ||
Non-Cash Financing Activity- Issuance of Securitization Notes and Certificates | 554,892,000 | 0 | 0 | ||
Non-Cash Financing Activity- Derecognition of Warehouse Line Debt | (158,857,000) | 0 | 0 | ||
Cash and Cash Equivalents | 64,635,000 | 57,945,000 | 45,795,000 | ||
Restricted cash | 155,773,000 | [1] | 149,114,000 | [1] | 152,668,000 |
Prosper Funding LLC | |||||
Cash Flows from Operating Activities: | |||||
Net Income (Loss) | 5,942,000 | 879,000 | 4,841,000 | ||
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities: | |||||
Change in Fair Value of Financial Instruments, Net | 374,000 | 701,000 | 514,000 | ||
Other Non-Cash Changes in Borrower Loans, Loans Held for Sale and Notes | (694,000) | (239,000) | 86,000 | ||
Depreciation and Amortization | 4,397,000 | 5,664,000 | 5,853,000 | ||
Gain on Sale of Borrower Loans | (13,033,000) | (14,315,000) | (14,138,000) | ||
Change in Fair Value of Servicing Rights | 13,682,000 | 13,316,000 | 11,862,000 | ||
Changes in Operating Assets and Liabilities: | |||||
Purchase of Loans Held for Sale at Fair Value | (2,320,560,000) | (2,365,431,000) | (2,619,130,000) | ||
Proceeds from Sales and Principal Payments of Loans Held for Sale at Fair Value | 2,320,560,000 | 2,365,470,000 | 2,619,709,000 | ||
Other Assets | (426,000) | (198,000) | 61,000 | ||
Accounts Payable and Accrued Liabilities | (2,557,000) | 3,945,000 | (1,478,000) | ||
Payable to Investors | (21,966,000) | (4,859,000) | (9,513,000) | ||
Net Related Party Receivable/Payable | 2,251,000 | (2,482,000) | 2,371,000 | ||
Other Liabilities | (789,000) | 590,000 | 2,247,000 | ||
Net Cash Used in Operating Activities | (12,819,000) | 3,041,000 | 3,285,000 | ||
Cash Flows from Investing Activities: | |||||
Purchase of Borrower Loans Held at Fair Value | (170,326,000) | (177,101,000) | (194,887,000) | ||
Principal Payments of Borrower Loans Held at Fair Value | 165,481,000 | 175,117,000 | 192,054,000 | ||
Purchases of Property and Equipment | (6,374,000) | (3,261,000) | (5,092,000) | ||
Maturities of Short Term Investments | 0 | 0 | 1,280,000 | ||
Net Cash Provided by (Used in) Investing Activities | (11,219,000) | (5,245,000) | (6,645,000) | ||
Cash Flows from Financing Activities: | |||||
Proceeds from Issuance of Notes Held at Fair Value | 171,138,000 | 176,830,000 | 194,391,000 | ||
Payments of Notes Held at Fair Value | (167,420,000) | (175,760,000) | (191,828,000) | ||
Cash Distributions to Parent | (9,000,000) | 0 | (5,800,000) | ||
Net Cash (Used in) Provided by Financing Activities | (5,282,000) | 1,070,000 | (3,237,000) | ||
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash | (29,320,000) | (1,134,000) | (6,597,000) | ||
Cash, Cash Equivalents and Restricted Cash at Beginning of the Period | 147,181,000 | 148,315,000 | 154,912,000 | ||
Cash, Cash Equivalents and Restricted Cash at End of the Period | 117,861,000 | 147,181,000 | 148,315,000 | ||
Supplemental Disclosure of Cash Flow Information: | |||||
Cash paid for interest | 39,229,000 | 41,098,000 | 43,776,000 | ||
Non-Cash Investing Activity- Accrual for Property and Equipment, Net | 246,000 | 1,101,000 | 225,000 | ||
Cash and Cash Equivalents | 7,462,000 | 11,163,000 | 8,223,000 | ||
Restricted cash | $ 110,399,000 | $ 136,018,000 | $ 140,092,000 | ||
[1] | (1) Includes amounts in consolidated variable interest entities (VIEs) presented separately in the table below. |
Organization and Business
Organization and Business | 12 Months Ended |
Dec. 31, 2019 | |
Entity Information [Line Items] | |
Organization and Business | Organization and Business Prosper Marketplace, Inc. was incorporated in the state of Delaware on March 22, 2005. Except as the context requires otherwise, as used in these notes to consolidated financial statements of Prosper Marketplace, Inc., “Prosper”, “PMI”, and the "Company" refer to Prosper Marketplace, Inc. and its wholly-owned subsidiaries on a consolidated basis. PMI developed a peer-to-peer online credit marketplace (the “marketplace”), and in February 2013, transferred ownership of the marketplace to Prosper Funding LLC (“PFL”), its wholly-owned subsidiary. All of the borrower payment dependent notes (“Notes”) issued and sold through the marketplace today are issued and sold by PFL. PFL also operates the marketplace and facilitates the origination of unsecured, consumer loans by WebBank (“Borrower Loans”), an FDIC-insured, Utah-chartered industrial bank, through the marketplace. Pursuant to a Loan Account Program Agreement between PMI and WebBank, PMI manages the operation of the marketplace as agent of WebBank in connection with the submission of loan applications by potential borrowers. PMI also manages the origination of related loans by WebBank and the funding of such Borrower Loans by WebBank. On February 1, 2013, PFL entered into an Administration Agreement with PMI in its capacity as licensee, corporate administrator, loan marketplace administrator and loan and Note servicer, pursuant to which PMI provides certain back office support, loan platform administration and loan servicing to PFL. The marketplace is designed to allow investors to invest in Borrower Loans in an open, transparent marketplace, with the aim of allowing both investors and borrowers to benefit financially as well as socially. Prosper believes marketplace lending represents a model of consumer lending where individuals and institutions can earn the interest spread of a traditional consumer lender but must also assume the credit risk of a traditional consumer lender. A borrower who wishes to obtain a Borrower Loan through the marketplace must post a loan listing on the marketplace. Listings are allocated to one of two investor funding channels: (i) the “Note Channel,” which allows investors to commit to purchase Notes from PFL, the payments of which are dependent on PFL’s receipt of payments made on the corresponding Borrower Loan; and (ii) the “Whole Loan Channel,” which allows investors to commit to purchase 100% of a Borrower Loan directly from Prosper. As of December 31, 2019, the marketplace is open to investors in 30 states and the District of Columbia. Additionally, as of December 31, 2019, the marketplace is open to borrowers in 48 states and the District of Columbia. Currently our marketplace does not operate internationally. |
Prosper Funding LLC | |
Entity Information [Line Items] | |
Organization and Business | Organization and Business Prosper Funding LLC was formed in the state of Delaware in February 2012 as a limited liability company with Prosper Marketplace, Inc. (“PMI”) as its sole equity member. Except as the context otherwise requires, as used in these Notes to consolidated financial statements of Prosper Funding LLC, “PFL”, ”Prosper Funding” and the “Company” refer to Prosper Funding LLC and its wholly owned subsidiaries, Prosper Asset Holdings LLC (“PAH”), a Delaware limited liability company, and Prosper Depositor LLC, a Delaware limited liability company, on a consolidated basis. Prosper Funding did not have any items of other comprehensive income (loss) during any of the periods presented in the consolidated financial statements as of and for the years ended December 31, 2019, 2018 and 2017. Prosper Funding was formed by PMI to hold Borrower Loans and issue Notes through the marketplace. Although Prosper Funding is consolidated with PMI for accounting and tax purposes, Prosper Funding has been organized and is operated in a manner that is intended to minimize the likelihood that it would be substantively consolidated with PMI in a bankruptcy proceeding. Prosper Funding’s intention is to minimize the likelihood that its assets would be subject to claims by PMI’s creditors if PMI were to file for bankruptcy, as well as to minimize the likelihood that Prosper Funding will become subject to bankruptcy proceedings directly. Prosper Funding seeks to achieve this by placing certain restrictions on its activities and implementing certain formal procedures designed to expressly reinforce its status as a distinct entity from PMI. Since February 1, 2013, all Notes issued and sold through the marketplace are issued, sold and serviced by Prosper Funding. Pursuant to a Loan Account Program Agreement between PMI and WebBank, PMI manages the operation of the marketplace, as agent of WebBank, in connection with the submission of Borrower Loan applications by potential borrowers, the origination of related Borrower Loans by WebBank and the funding of such Borrower Loans by WebBank. Pursuant to an Administration Agreement between Prosper Funding and PMI, PMI manages all other aspects of the marketplace on behalf of Prosper Funding. As a result Prosper Funding earns significant revenues and incurs significant expenses with a related party, its direct parent company, PMI. A borrower who wishes to obtain a loan through the marketplace must post a loan listing on the marketplace. Prosper Funding allocates listings to one of two investor funding channels: (i) the “Note Channel,” which allows investors to commit to purchase Notes from Prosper Funding, the payments of which are dependent on Prosper Funding’s receipt of payments made on the corresponding Borrower Loan; and (ii) the “Whole Loan Channel,” which allows investors to commit to purchase 100% of a Borrower Loan directly from Prosper Funding. All loans requested and obtained through the marketplace are unsecured obligations of individual borrowers with a fixed interest rate and loan terms set at three Prosper Funding’s marketplace is designed to allow investors to invest in Borrower Loans in a transparent marketplace, with the aim of allowing both investors and borrowers to benefit financially as well as socially. Prosper Funding believes marketplace lending represents a new model of consumer lending, where individuals and institutions can earn the interest spread of a traditional consumer lender but must also assume the credit risk of a traditional consumer lender. As of December 31, 2019, Prosper Funding’s marketplace was open to investors in 30 states and the District of Columbia. Additionally, as of December 31, 2019, Prosper Funding’s marketplace was open to borrowers in 48 states and the District of Columbia. Currently, the marketplace does not operate internationally. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Entity Information [Line Items] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements include the accounts of PMI and its wholly owned subsidiaries including PFL, Prosper Healthcare Lending LLC (“PHL”), BillGuard, Inc. (“BillGuard”), and its consolidated VIEs including Prosper Warehouse I Trust (“PWIT”), Prosper Warehouse II Trust (“PWIIT”), Prosper Marketplace Issuance Trust, Series 2019-1 (“PMIT 2019-1”), Prosper Marketplace Issuance Trust, Series 2019-2 (“PMIT 2019-2”) and Prosper Marketplace Issuance Trust, Series 2019-4 (“PMIT 2019-4”). All intercompany balances and transactions between PMI and its subsidiaries have been eliminated in consolidation. PMI and PFL’s financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the related disclosures, including contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. These estimates, judgments and assumptions include but are not limited to the following: valuation of Loans Held for Sale, Borrower Loans and associated Notes, Certificates Issued by Securitization Trust, valuation of servicing rights and loan trailing fee liability, valuation allowance on deferred tax assets, stock-based compensation expense, Intangible Assets, Goodwill, Convertible Preferred Stock Warrant Liability, Repurchase Obligations and contingent liabilities. These judgments, estimates and assumptions are inherently subjective in nature and actual results may differ from these estimates and assumptions. Consolidation of Variable Interest Entities A variable interest entity (VIE) is a legal entity that has either a total equity investment that is insufficient to finance its activities without additional subordinated financial support or whose equity investors lack the characteristics of a controlling financial interest. Prosper’s variable interest arises from contractual, ownership or other monetary interests in the entity, which change with fluctuations in the fair value of the entity’s net assets. A VIE is consolidated by its primary beneficiary, which is the party that has both the power to direct the activities that most significantly impact the VIE’s economic performance, and the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. Prosper consolidates a VIE when it is deemed to be the primary beneficiary. Prosper assesses whether or not it is the primary beneficiary of a VIE on an ongoing basis. Transfers of Financial Assets Prosper accounts for transfers of financial assets as sales when it has surrendered control over the transferred assets. Control is generally considered to have been surrendered when the transferred assets have been legally isolated from Prosper, the transferee has the right to pledge or exchange the assets without any significant constraints, and Prosper has not entered into a repurchase agreement, does not hold unconditional call options and has not written put options on the transferred assets. In assessing whether control has been surrendered, Prosper considers whether the transferee would be a consolidated affiliate and the impact of all arrangements or agreements made contemporaneously with, or in contemplation of the transfer, even if they were not entered into at the time of transfer. Prosper measures gain or loss on sale of financial assets as the net proceeds received on the sale less the carrying amount of the loans sold. The net proceeds of the sale include the fair value of any assets obtained or liabilities incurred as part of the transaction, including, but not limited to Servicing Assets, retained securities, and recourse obligations. Fair Value Measurement Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Prosper uses fair value measurements in its fair value disclosures and to record Available for Sale Investments, Borrower Loans, Loans Held for Sale, Servicing Assets, Notes, Certificates Issued by Securitization Trust, and Convertible Preferred Stock Warrant Liability at fair value on a recurring basis. The fair value hierarchy includes a three-level classification, which is based on whether the inputs to the valuation methodology used for measurement are observable: Level 1 — Quoted market prices in active markets for identical assets or liabilities. Level 2 — Inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. Level 3 — Unobservable inputs. When developing fair value measurements, Prosper maximizes the use of observable inputs and minimizes the use of unobservable inputs. However, for certain instruments Prosper must utilize unobservable inputs in determining fair value due to the lack of observable inputs in the market, which requires greater judgment in measuring fair value. In instances where there is limited or no observable market data, fair value measurements for assets and liabilities are determined using assumptions that management believes a market participant would use in pricing the asset or liability. As observable market prices are not available for the Borrower Loans, Loans Held for Sale, Notes, Certificates Issued by Securitization Trust and Servicing Assets, or for similar assets and liabilities, Prosper believes the Borrower Loans, Loans Held for Sale, Notes, Certificates Issued by Securitization Trust and Servicing Assets are considered level 3 financial instruments. Prosper primarily uses a discounted cash flow model to estimate their fair value, and key assumptions used in valuation include default rates and prepayment rates derived from historical performance and discount rates based on estimates of the rates of return that investors would require when investing in financial instruments with similar characteristics. The obligation to pay principal and interest on any series of Notes is equal to the loan payments, if any, that are received on the corresponding Borrower Loan, net of our servicing fee which is 1.0% of the outstanding balance. The fair value election for Notes and Borrower Loans allows both the assets and the related liabilities to receive similar accounting treatment for expected losses which is consistent with the subsequent cash flows to investors that are dependent upon borrower payments. As such, the fair value of a series of Notes is approximately equal to the fair value of the corresponding Borrower Loan, adjusted for the 1.0% servicing fee and the timing of loan purchase, Note issuance and borrower payments subsequently disbursed to such Note holders. As a result, the valuation of the Notes uses the same methodology and assumptions as the Borrower Loans, except that the Notes incorporate the 1.0% servicing fee and any differences in timing in payments. The effective interest rate associated with a group of Notes is less than the interest rate earned on the corresponding Borrower Loan due to the 1.0% servicing fee. Refer to Note 8 for additional fair value disclosures. Cash and Cash Equivalents Cash includes various unrestricted deposits with investment-grade rated financial institutions. Cash equivalents consist of highly liquid marketable securities with original maturities of three months or less at the time of purchase and consist primarily of money market funds, commercial paper, US treasury securities and US agency securities. Cash equivalents are recorded at cost, which approximates fair value. At times, our cash balances may exceed federally insured amounts and potentially subject the Company to a concentration of credit risk. The Company believes that no significant concentration of credit risk exists with respect to these balances based on its assessment of the creditworthiness of these financial institutions. Restricted Cash Restricted cash consists primarily of cash deposits and short term certificate of deposit accounts held as collateral as required for long term leases, loan funding and servicing activities, and cash that investors or Prosper have on the marketplace that has not yet been invested in Borrower Loans or disbursed to the investor. Short Term Investments Short Term Investments which are included in Prepaid and Other Assets consist of certificates of deposit with a term greater than three months but less than a year that are held as collateral as required for loan funding and servicing activities. Available for Sale Investments Available for Sale Investments are recorded at fair value with unrealized gains and losses reported, net of taxes, in Accumulated Other Comprehensive Income (Loss) included in stockholders' equity unless management determines that an investment is other-than-temporarily impaired. Management evaluates whether impairment of Available for Sale debt securities is other than temporary impairment (“OTTI”) on a quarterly basis. Debt securities with unrealized losses are considered OTTI if Prosper intends to sell the investment or if it is more likely than not that it will be required to sell such investment before any anticipated recovery. If management determines that an investment is OTTI under these circumstances, the impairment recognized in earnings is measured as the entire difference between the amortized cost and then-current fair value. An investment is also OTTI if management does not expect to recover all of the amortized cost of the investment. In this circumstance, the impairment recognized in earnings represents estimated credit losses and is measured by the difference between the present value of expected cash flows and the amortized cost of the investment. Management utilizes cash flow models to estimate the expected future cash flow from the securities to estimate the credit loss. Expected cash flows are discounted using the investment's effective interest rate. The evaluation of whether Prosper expects to recover the amortized cost of an investment is inherently judgmental. The evaluation includes the assessment of several bond performance indicators, including the current price and magnitude of the unrealized loss and whether Prosper has received all scheduled principal and interest payments. There were no impairment charges recognized during the years ended December 31, 2019 and 2018. Borrower Loans, Loans Held for Sale, Notes and Certificates Issued by Securitization Trust Borrower Loans are funded either through the Note Channel or through the Whole Loan Channel. Through the Note Channel, Prosper purchases Borrower Loans from WebBank then issues Notes to investors and holds the Borrower Loans until maturity. The obligation to repay a series of Notes issued through the Note Channel is dependent upon the repayment of the associated Borrower Loans. Borrower Loans funded and Notes issued through the Note Channel are carried on Prosper’s Consolidated Balance Sheets as assets and liabilities, respectively. In 2019, Prosper began financing the purchase of Borrower Loans through the Whole Loan Channel through securitization transactions, which issued senior notes, risk retention interests, and residual certificates. Associated securitization trusts are deemed consolidated VIEs, and as a result the Borrower Loans held in the securitization trusts are included in “Borrower Loans, at Fair Value”, senior notes sold to third party investors in “Notes Issued by Securitization Trust”, and the risk retention interest and residual certificates held by third party investors in “Certificates Issued by Securitization Trust, at Fair Value” in the Consolidated Balance Sheets. Refer to Note 7 - Securitization for additional disclosures. Prosper uses Warehouse Lines to purchase Loans Held for Sale that may be subsequently contributed to securitization transactions or sold to investors. Loans Held for Sale are included in “Loans Held for Sale, at Fair Value” in the Consolidated Balance Sheets. See Note 11 - Debt for more details on Warehouse Lines. Borrower Loans and Loans Held for Sale are purchased from WebBank. Prosper places Borrower Loans and Loans Held for Sale on non-accrual status when they are 120 days past due. When a loan is placed on non-accrual status, Prosper stops accruing interest and reverses all accrued but unpaid interest as of such date. Additionally, Prosper charges-off Borrower Loans and Loans Held for Sale when they are 120 days past due. The fair value of loans 120 or more days past due generally consists of the expected recovery from debt sales in subsequent periods. Prosper has elected the fair value option for Borrower Loans, Loans Held for Sale, Notes, and Certificates Issued by Securitization Trust. Changes in fair value of Borrower Loans funded through the Note Channel are largely offset by the changes in fair value of Notes due to the borrower payment-dependent design of the Notes. Changes in fair value of Borrower Loans held in consolidated securitization trusts are partially offset by changes in fair value of the Certificates Issued by Securitization Trust. Changes in fair value of Loans Held for Sale are recorded through Proper's earnings and Prosper collects interest on Loans Held for Sale. Changes in fair value of Borrower Loans, Loans Held for Sale, Notes, and Certificates Issued by Securitization Trust are included in “Change in Fair Value of Financial Instruments, Net” on the Consolidated Statements of Operations. Prosper primarily uses a discounted cash flow model to estimate the fair value of Borrower Loans, Loans Held for Sale, Notes, and Certificates Issued by Securitization Trust. The key assumptions used in valuation include default rates and prepayment rates derived from historical performance and discount rates based on estimates of the rates of return that investors would require when investing in financial instruments with similar characteristics. Loan Servicing Assets and Liabilities Prosper records Servicing Assets and Liabilities at their estimated fair values for servicing rights retained when Prosper sells Borrower Loans to unrelated third-party buyers. The change in fair value of Servicing Assets and Liabilities is recognized in Servicing Fees, Net. The gain or loss on a loan sale is recorded in Gain on Sale of Borrower Loans while the fair value of the servicing rights, which is based on the degree to which the contractual loan servicing fee is above or below an estimated market servicing rate is recorded in Servicing Assets or Liabilities. Servicing assets and liabilities are recorded in Servicing Assets and Other Liabilities, respectively, on the Consolidated Balance Sheets. Prosper uses a discounted cash flow model to estimate the fair value of the loan Servicing Assets or Liabilities which considers the contractual projected servicing fee revenue that Prosper earns on the Borrower Loans, the estimated market servicing rates to service such loans, the prepayment rates, the default rates and the current principal balances of the Borrower Loans. Property and Equipment Property and Equipment consists of computer equipment, office furniture and equipment, leasehold improvements, software purchased or developed for internal use and web site development costs. Property and Equipment is stated at cost, less accumulated depreciation and amortization, and is computed using the straight-line method based upon estimated useful lives of the assets. Estimated useful lives of the assets are as follows: Furniture and fixtures 7 years Office equipment 5 years Computers and equipment 3 years Leasehold improvements 5 - 8 years Software and website development costs 1 - 5 years The costs to develop software for the website and other internal uses are capitalized when management has authorized and committed project funding, when preliminary development efforts are successfully completed, and when it is probable that the project will be completed and the software will be used as intended. Capitalized software and website development costs primarily include software licenses acquired, fees paid to outside consultants and salaries and payroll-related costs for employees directly involved in the development efforts. Costs incurred prior to meeting these criteria, together with costs incurred for training and maintenance, are expensed. Costs incurred for upgrades and enhancements that are considered to be probable to result in additional functionality are capitalized. Capitalized costs are included in Property and Equipment and amortized to expense using the straight-line method over their expected lives. Software and website development assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of software and website development assets to be held and used is measured by a comparison of the carrying amount of the asset group to the future net undiscounted cash flows expected to be generated by the asset group. If such software and website development assets are considered to be impaired, the impairment to be recognized is the excess of the carrying amount over the fair value of the software and website development asset group. Leases Management determines if an arrangement is a lease at inception. Operating lease right-of-use (“ROU”) assets and operating lease liabilities are included on the Consolidated Balance Sheets in Property and Equipment, Net and in Other Liabilities, respectively. For certain leases with original terms of twelve months or less, PMI recognizes the lease expense as incurred and does not recognize ROU assets and lease liabilities. If a contract contains a lease, management evaluates whether it should be classified as an operating or finance lease. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. As most of PMI's leases do not provide an implicit rate, management uses an incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The operating lease ROU assets are evaluated for impairment utilizing the same impairment model used for Property and Equipment. Goodwill and Intangibles Goodwill associated with business combinations is computed by recognizing the portion of the purchase price that is not tied to individually identifiable and separately recognizable assets. Goodwill is not amortized but is tested for impairment annually or whenever indications of impairment exist. Annual impairment testing occurs on October 1. Impairment exists whenever the carrying value of Goodwill exceeds its implied fair value. Adverse changes in impairment indicators such as loss of key personnel, increased regulatory oversight or unplanned changes in operations could result in impairment. PMI did not recognize any Goodwill impairments during the years ended December 31, 2019, 2018 and 2017. Costs of internally developing any intangibles is expensed as incurred. Intangible Assets identified through the acquisitions of American Healthcare Lending and BillGuard include customer relationships, technology and a brand name. The customer relationship Intangible Assets are amortized on an accelerated basis over three three Payable to Investors Payable to Investors primarily represents the obligation to investors related to cash held in an account for the benefit of investors and payments-in-process received from borrowers. Warehouse Lines and Notes Issued by Securitization Trust Warehouse Lines and Notes Issued by Securitization Trust are carried at amortized cost. Prosper defers specific incremental costs directly related to entering into the Warehouse Lines and issuing Notes Issued by Securitization Trust and subsequently amortizes them into interest expense over the life of the arrangements. Convertible Preferred Stock Warrant Liability Freestanding warrants to acquire shares that may be redeemable are accounted for in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 480, Distinguishing Liabilities from Equity (“ASC 480”). Under ASC 480, vested freestanding warrants to purchase the Company’s convertible redeemable preferred stock are classified as a liability on the Consolidated Balance Sheets and carried at fair value because the warrants may conditionally obligate the Company to transfer assets at some point in the future. The Company records the warrants at fair value on issuance. The warrants are subject to remeasurement to fair value at each balance sheet date, and any change in their fair value is recognized as “Change in Fair Value of Convertible Preferred Stock Warrants” in the Consolidated Statements of Operations. The Company will continue to adjust the liability for changes in fair value until the earlier of the exercise or expiration of the warrants, the completion of a deemed liquidation event or the conversion of convertible redeemable preferred stock into Common Stock. Loan Trailing Fee Liability On July 1, 2016, Prosper signed a series of agreements with WebBank which, among other things, includes an additional program fee (the “Loan Trailing Fee”) paid to WebBank in connection with the performance of each loan sold to Prosper. These agreements became effective as of August 1, 2016. The Loan Trailing Fee is dependent on the amount and timing of principal and interest payments made by borrowers of the underlying loans, irrespective of whether the loans are sold by Prosper, and gives WebBank an ongoing financial interest in the performance of the loans it originates. This fee is paid by Prosper to WebBank over the term of the respective loans and is a function of the principal and interest payments made by borrowers of such loans. In the event that principal and interest payments are not made with respect to any loan, Prosper is not required to make the related Loan Trailing Fee payment. The obligation to pay the Loan Trailing Fee for any loan sold to Prosper is recorded at fair value at the time of the origination of such loan within Other Liabilities and recorded as a reduction of “Transaction Fees, net”. Any changes in the fair value of this liability are recorded in “Servicing Fees, Net” on the consolidated statements of operations. The fair value of the Loan Trailing Fee represents the present value of the expected monthly Loan Trailing Fee payments, which takes into consideration certain assumptions related to expected prepayment rates and defaults rates. Revenue Recognition Revenue primarily results from transaction and Servicing Fees and net interest income earned. Fees include Transaction Fees for our services performed on behalf of WebBank to originate a loan. PMI also has other smaller sources of revenue reported as Other Revenues, including referral fees, and securitization fees. Transaction Fees Prosper has a customer contract with WebBank to facilitate the origination of all Borrower Loans through Prosper’s marketplace. In exchange for these services, Prosper earns a transaction fee from WebBank that is recognized when performance is complete and upon the successful origination of a Borrower Loan. The transaction fee Prosper earns is determined by the term and credit grade of the Borrower Loan that is facilitated on Prosper’s marketplace, and ranges from 1.00% to 5.00% of the original principal amount of each Borrower Loan that WebBank originates. Prosper records the transaction fee net of any fees paid to WebBank because Prosper does not receive an identifiable benefit from WebBank other than the borrower loan that has been recognized at fair value. Servicing Fees Investors who purchase Borrower Loans from Prosper typically pay Prosper a servicing fee which is currently set at 1.075% per annum of the outstanding principal balance of the borrower loan prior to applying the current payment. The servicing fee compensates Prosper for the costs incurred in servicing the borrower loan, including managing payments from borrowers, managing payments to investors and maintaining investors’ account portfolios. Prosper records Servicing Fees from investors as a component of operating revenue when received. Gain on Sale of Borrower Loans Prosper recognizes gains or losses on the sale of Borrower Loans when it sells Borrower Loans to third parties. Prosper measures gain or loss on sale of Borrower Loans as the net proceeds received on a sale less the carrying amount of the Borrower Loans sold. The net proceeds of the sale represent the fair value of any assets obtained or liabilities incurred as part of the transaction, including, but not limited to Servicing Assets, retained securities, and repurchase obligations. Interest Income on Borrower Loans and Interest Expense on Financial Instruments Prosper recognizes interest income on Borrower Loans originated through the Note Channel and interest expense on the corresponding Notes using the accrual method based on the stated interest rate to the extent Prosper believes it to be collectable. Similarly, Prosper recognizes interest income on Loans Held for Sale and interest expense on the Warehouse Line using the accrual method based on the stated interest rate to the extent Prosper believes it to be collectable. Other Revenues Other Revenues consist primarily of securitization fees and credit referral fees. Credit referral fees are where partner companies pay us an agreed upon amount for successful referrals of customers from our marketplace. The transaction price is a fixed amount per referral and is recognized by the Company upon a successful referral. Securitization fees represent fees Prosper earns to facilitate securitizations for purchasers of Borrower Loans and is recognized as “Other Revenues” when the securitization is completed. In some instances Prosper may also provide a guarantee, which requires a determination of the fair value of the guarantee and an allocation of the remaining transaction price to the securitization performance obligation. As of December 31, 2019, Prosper had no contract assets, contract liabilities or deferred contract costs. As of December 31, 2019, Prosper had no unsatisfied performance obligations related to Transaction Fees or Other Revenues. Advertising Costs Advertising costs are expensed when incurred and are included in “Sales and Marketing” expense in the accompanying Consolidated Statements of Operations. Prosper incurred advertising costs of $32.8 million, $48.0 million and $66.9 million for the years ended December 31, 2019, 2018 and 2017, respectively. Stock-Based Compensation Management determines the fair value of the Company's stock options issued to employees on the date of grant using the Black-Scholes option pricing model, which is impacted by the fair value of Common Stock as well as by changes in assumptions that include, but are not limited to, the expected Common Stock price volatility over the term of the option awards, the expected term of the awards, risk-free interest rates and the expected dividend yield. PMI recognizes compensation expense for stock-based awards on a straight-line basis over the period during which an employee is required to provide services in exchange for the award (the vesting period of the award). Stock-based compensation expense is recognized only for those awards expected to vest. PMI estimates future forfeitures at the date of grant and revises the estimates, if necessary, in subsequent periods if actual forfeitures differ from estimates. Stock-based awards issued to non-employees are marked-to-market up until the point that the awards measurement period has been achieved. Compensation expense for stock options issued to non-employees is calculated using the Black-Scholes option pricing model and is recorded over the vesting period of the award. Foreign Currency Transactions The functional currency of Prosper's international subsidiary is the U.S. dollar. For this subsidiary, foreign currency denominated monetary assets and liabilities are remeasured into U.S. dollars at current exchange rates and foreign currency denominated nonmonetary assets and liabilities are remeasured into U.S. dollars at historical exchange rates. Gains or losses from foreign currency remeasurement and settlements are included in “General and Administrative” expense in the Consolidated Statements of Operations. Repurchase of Convertible Preferred Stock and Common Stock Upon repurchase of Convertible Preferred Stock, Prosper recognizes the difference between repurchase price and the carrying amount of the Convertible Preferred Stock in Additional Paid-In Capital. Additionally, if Common Stock is repurchased for constructive retirement, the difference between the repurchase price and par value of the Common Stock is recorded through Additional Paid-In Capital. Income Taxes The asset and liability method is used to account for income taxes. Under this method, deferred income tax assets and liabilities are based on the differences between the financial statement carrying values and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Prosper’s policy is to include interest and penalties related to gross unrecognized tax benefits within its provision for income taxes. U.S. Federal, Israel, California and other state income tax returns are filed. Prosper is not currently undergoing any income tax examinations. Due to the cumulative the net operating loss, generally all tax years remain open. Prosper recognizes benefits from uncertain tax positions only if management believes that it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. Other Expense (Income), Net Other Expense, Net includes interest income from Available for Sale Investments, sublease income, SEC settlement costs and contract termination costs that are expected to be non-recurring and not part of restructuring activities. Restructuring Charges Restructuring Charges consist of severance costs and contract termination-related costs and impairment charges associated with the severance actions. A liability for severance costs is typically recognized when the plan of termination has been communicated to the affected employees and is measured at its fair value at the communication date. Contract termination costs consist primarily of costs that will continue to be incurred under operating leases for their remaining terms without economic benefit to the Company. A liability for contract termination costs is recognized at the date the Company ceases using the rights conveyed by the lease contract and is recorded at fair value, which is determined based on the remaining contractual lease rentals reduced by estimated sublease rentals. Comprehensive Income Marketable debt securities are generally considered available-for-sale and are carried at fair value, based on quoted market prices or other readily available market information. Gains and losses are recognized when realized using the specific identification method and included in “Other Expense (Income)”, Net in the Consolidated Statements of Operations. Unrealized gains and losses, net of taxes, are included in Accumulated Other Comprehensive Income, which is reflected as a separate component of Stockholders’ Deficit in Prosper's Consolidated Balance Sheets. If management has determined that an other-than-temporary decline in fair value has occurred, the amount of the decli |
Prosper Funding LLC | |
Entity Information [Line Items] | |
Summary of Significant Accounting Policies | Significant Accounting Policies Basis of Presentation Prosper Funding’s consolidated financial statements include the accounts of Prosper Funding and its wholly-owned subsidiary PAH. All intercompany balances and transactions between Prosper Funding and PAH have been eliminated in consolidation. Prosper Funding’s financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Use of Estimates The preparation of Prosper Funding’s consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the related disclosures at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. These estimates, judgments and assumptions include, but are not limited to, the following: valuation of Loans Held for Sale, Borrower Loans and associated Notes, valuation of servicing rights, valuation of loan trailing fee liability, repurchase obligations, and contingent liabilities. Prosper Funding bases its estimates on historical experience from all Borrower Loans and on various other assumptions that it believes to be reasonable under the circumstances. Actual results could differ materially from estimates. Consolidation of Variable Interest Entities A variable interest entity (VIE) is a legal entity that has either a total equity investment that is insufficient to finance its activities without additional subordinated financial support or whose equity investors lack the characteristics of a controlling financial interest. Prosper’s variable interest arises from contractual, ownership or other monetary interests in the entity, which change with fluctuations in the fair value of the entity’s net assets. A VIE is consolidated by its primary beneficiary, which is the party that has both the power to direct the activities that most significantly impact the VIE’s economic performance, and the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. Prosper consolidates a VIE when it is deemed to be the primary beneficiary. Prosper assesses whether or not it is the primary beneficiary of a VIE on an ongoing basis. Transfers of Financial Assets Prosper accounts for transfers of financial assets as sales when it has surrendered control over the transferred assets. Control is generally considered to have been surrendered when the transferred assets have been legally isolated from Prosper, the transferee has the right to pledge or exchange the assets without any significant constraints, and Prosper has not entered into a repurchase agreement, does not hold unconditional call options and has not written put options on the transferred assets. In assessing whether control has been surrendered, Prosper considers whether the transferee would be a consolidated affiliate and the impact of all arrangements or agreements made contemporaneously with, or in contemplation of the transfer, even if they were not entered into at the time of transfer. Prosper measures gain or loss on sale of financial assets as the net proceeds received on the sale less the carrying amount of the loans sold. The net proceeds of the sale represent the fair value of any assets obtained or liabilities incurred as part of the transaction, including, but not limited to Servicing Assets, retained securities, and recourse obligations. Fair Value Measurement Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Prosper uses fair value measurements in its fair value disclosures and to record Borrower Loans, Loans Held for Sale, Servicing Assets, Notes, and Loan Trailing Fee Liability at fair value on a recurring basis. The fair value hierarchy includes a three-level classification, which is based on whether the inputs to the valuation methodology used for measurement are observable: Level 1 — Quoted market prices in active markets for identical assets or liabilities. Level 2 — Inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. Level 3 — Unobservable inputs. When developing fair value measurements, Prosper maximizes the use of observable inputs and minimizes the use of unobservable inputs. However, for certain instruments Prosper must utilize unobservable inputs in determining fair value due to the lack of observable inputs in the market, which requires greater judgment in measuring fair value. In instances where there is limited or no observable market data, fair value measurements for assets and liabilities are determined using assumptions that management believes a market participant would use in pricing the asset or liability. As observable market prices are not available for the Borrower Loans, Loans Held for Sale, Notes, and Servicing Assets, or for similar assets and liabilities, Prosper believes the Borrower Loans, Loans Held for Sale, Notes, and Servicing Assets should be considered level 3 financial instruments. Prosper primarily uses a discounted cash flow model to estimate their fair value and key assumptions used in valuation include default rates and prepayment rates derived from historical performance and discount rates based on estimates of the rates of return that investors would require when investing in financial instruments with similar characteristics. The obligation to pay principal and interest on any series of Notes is equal to the loan payments, if any, that are received on the corresponding Borrower Loan, net of our servicing fee which is generally 1.0% of the outstanding balance. The fair value election for Notes and Borrower Loans allows both the assets and the related liabilities to receive similar accounting treatment for expected losses which is consistent with the subsequent cash flows to investors that are dependent upon borrower payments. As such, the fair value of a series of Notes is approximately equal to the fair value of the corresponding Borrower Loan, adjusted for the 1.0% servicing fee and the timing of loan purchase, Note issuance and borrower payments subsequently disbursed to such Note holders. As a result, the valuation of the Notes uses the same methodology and assumptions as the Borrower Loans, except that the Notes incorporate the 1.0% servicing fee and any differences in timing in payments. Any unrealized gains or losses on the Borrower Loans and Notes for which the fair value option has been elected is recorded as a separate line item in the statement of operations. The effective interest rate associated with a group of Notes is less than the interest rate earned on the corresponding Borrower Loan due to the 1.0% servicing fee. Refer to Note 7 for addition al fair value disclosures. Cash and Cash Equivalents Cash includes various unrestricted deposits with highly rated financial institutions. Cash equivalents consist of highly liquid marketable securities with original maturities of three months or less at the time of purchase and consist primarily of money market funds, commercial paper, U.S. treasury securities and U.S. agency securities. Cash equivalents are recorded at cost, which approximates fair value. Restricted Cash Restricted Cash consists primarily of cash deposits and short term certificates of deposit accounts for loan funding and servicing activities, and cash that investors or Prosper Funding has on the marketplace that has not yet been invested in Borrower Loans or disbursed to the investor. Short Term Investments Short term investments consists of certificates of deposit with a term greater than three months but less than a year that are held as collateral as required for loan funding and servicing activities. Borrower Loans, Loans Held for Sale and Notes Through the Note Channel, Prosper Funding purchases Borrower Loans from WebBank then issues notes, and holds the Borrower Loans as a receivable until maturity. The obligation to repay a series of notes issued through the Note Channel is dependent upon the repayment of the associated Borrower Loans. Borrower loans funded and notes issued through the Note Channel are carried on Prosper Funding’s Consolidated Balance Sheets as assets and liabilities, respectively. Prosper Funding places Borrower Loans and Loans Held for Sale on non-accrual status when they are 120 days past due. When a loan is placed on non-accrual status, Prosper stops accruing interest and reverses all accrued but unpaid interest as of such date. Additionally, Prosper charges-off Borrower Loans and Loans Held for Sale when they are 120 days past due. The fair value of loans 120 days past due generally consists of the expected recovery from debt sales in subsequent periods. Management has elected the fair value option for Borrower Loans, Loans Held for Sale, and Notes. Changes in fair value of Borrower Loans are largely offset by the changes in fair value of Notes due to the borrower payment-dependent design of the Notes. Changes in fair value of Borrower Loans, Loans Held for Sale and Notes are included in “Change in Fair Value of Borrower Loans, Loans Held for Sale and Notes, Net” on the Consolidated Statements of Operations. Prosper Funding estimates the fair value of such Borrower Loans and Notes using discounted cash flow methodologies. The key assumptions used in valuation include default rates derived from historical performance and discount rates that reflect estimates of the rates of return that investors would require when investing in financial instruments with similar characteristics. Loan Servicing Assets and Liabilities Prosper Funding records Servicing Assets and liabilities at their estimated fair values for servicing rights retained when Prosper Funding sells Borrower Loans to unrelated third-party buyers. The change in fair value of Servicing Assets and liabilities is recognized in revenue as Servicing Fees, Net. The gain or loss on a loan sale is recorded in Gain (Loss) on Sale of Borrower Loans while the fair value of the servicing rights, which is based on the degree to which the contractual loan servicing fee is above or below an estimated market loan servicing rate, is recorded in Servicing Assets or Liabilities. Servicing assets and liabilities are recorded in Servicing Assets and Other Liabilities, respectively, on the Consolidated Balance Sheets. Prosper Funding uses a discounted cash flow model to estimate the fair value of the loan Servicing Assets or Liabilities which considers the contractual projected servicing fee revenue that Prosper Funding earns on the Borrower Loans, estimated market Servicing Fees to service such loans, prepayment rates, default rates and the current principal balances of the Borrower Loans. Software and Website Development Software and website development represents the software and website development costs that PMI transferred to Prosper Funding. Prosper Funding does not develop any of its own software or its website. Software and website development re included in Property and Equipment, Net and amortized to expense using the straight-line method over their expected lives which is generally one Payable to Investors Payable to Investors primarily represents the Company's obligation to investors related to cash held in an account for the benefit of investors and payments-in-process received from borrowers. Loan Trailing Fee Liability On July 1, 2016, Prosper signed a series of agreements with WebBank which, among other things, includes an additional program fee (the “Loan Trailing Fee”) paid to WebBank in connection with the performance of each loan sold to Prosper. These agreements were effective as of August 1, 2016. The Loan Trailing Fee is dependent on the amount and timing of principal and interest payments made by borrowers of the underlying loans, irrespective of whether the loans are sold by Prosper, and gives WebBank an ongoing financial interest in the performance of the loans it originates. This fee is paid by Prosper to WebBank over the term of the respective loans and is a function of the principal and interest payments made by borrowers of such loans. In the event that principal and interest payments are not made with respect to any loan, Prosper is not required to make the related Loan Trailing Fee payment. The obligation to pay the Loan Trailing Fee for any loan sold to Prosper is recorded at fair value at the time of the origination of such loan within Other Liabilities and recorded as a reduction of “Transaction Fees, net”. Any changes in the fair value of this liability are recorded in “Servicing Fees, Net” on the consolidated statements of operations. The fair value of the Loan Trailing Fee represents the present value of the expected monthly Loan Trailing Fee payments, which takes into consideration certain assumptions related to expected prepayment rates and defaults rates. Revenue Recognition Revenue primarily results from fees, net interest earned and gains on the sale of Borrower Loans. Fees consist of related party administrative fees and Servicing Fees paid by investors. The Company also has other smaller sources of revenue reported as Other Revenues including fees charged in relation to securitizations by outside investors. Administration Agreement License Fees Prosper Funding primarily generates revenues through license fees it earns through an Administration Agreement with PMI. The Administration Agreement contains a license granted by Prosper Funding to PMI that entitles PMI to use the platform for and in relation to: (i) PMI’s performance of its duties and obligations under the Administration Agreement relating to corporate administration, loan platform services, loan and Note servicing and marketing, and (ii) PMI’s performance of its duties and obligations to WebBank in relation to loan origination and funding. The license fees are based on the number of listings that are posted to the platform. Service Fees Investors who purchase Borrower Loans from Prosper through the Whole Loan Channel typically pay Prosper a servicing fee which is currently set at 1.075% per annum of the outstanding principal balance of the Borrower Loan prior to applying the current payment. The servicing fee compensates Prosper for the costs incurred in servicing the Borrower Loan, including managing payments from borrowers, managing payments to investors and maintaining investors’ account portfolios. Prosper records Servicing Fees from investors as a component of operating revenue when received. Gain (Loss) on Sale of Borrower Loans PFL recognizes gains or losses on the sale of Borrower Loans when it sells Borrower Loans to third parties. PFL measures gain or loss on sale of Borrower Loans as the net proceeds received on the sale less the carrying amount of the Borrower Loans sold. The net proceeds of the sale represent the fair value of any assets obtained or liabilities incurred as part of the transaction, including, but not limited to Servicing Assets, retained securities, and repurchase obligations. Interest Income on Borrower Loans and Interest Expense on Notes Prosper Funding recognizes interest income on Borrower Loans originated through the Note Channel and interest expense on the corresponding Notes using the accrual method based on the stated interest rate to the extent Prosper Funding believes it to be collectable. Administration Fee Expense - Related Party Pursuant to the Administration Agreement between Prosper Funding and PMI, PMI manages the marketplace on behalf of Prosper Funding. Accordingly each month, Prosper Funding is required to pay PMI an administration fee that is based on PMI’s (a) finance and legal personnel costs, (b) number of Borrower Loans originated through the Marketplace, (c) Servicing Fees collected by or on behalf of Prosper Funding, and (d) nonsufficient funds fees collected by or on behalf of Prosper Funding. In addition, under a second Administration Agreement between PMI and PAH, a wholly owned subsidiary of Prosper Funding, PAH is required to pay PMI an annual fee for PMI being the administrator of PAH’s operations. Recent Accounting Pronouncements Accounting Standards Adopted in the Current Period No accounting standards were adopted in the current period for Prosper Funding LLC. Accounting Standards Issued, to be Adopted in Future Periods In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement.” Entities will no longer be required to disclose the amount of and reasons for transfers between level 1 and level 2 of the fair value hierarchy, but public companies will be required to disclose the range and weighted average used to develop significant unobservable inputs for level 3 fair value measurements. ASU No. 2018-13 is effective for all entities for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years, but entities are permitted to early adopt either the entire standard or only the provisions that eliminate or modify the requirements. The guidance only affects disclosures in the notes to the consolidated financial statements and will not affect Prosper’s Consolidated Balance Sheets or Consolidated Statements of Operations. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2019 | |
Entity Information [Line Items] | |
Property and Equipment, Net | Property and Equipment, Net Property and Equipment, Net consist of the following (in thousands): December 31, 2019 2018 Operating lease right-of-use assets 16,213 — Computer equipment 13,420 15,193 Internal-use software and website development costs 28,904 22,505 Office equipment and furniture 2,999 3,015 Leasehold improvements 7,158 7,157 Assets not yet placed in service 2,445 2,745 Property and equipment 71,139 50,615 Less: Accumulated depreciation and amortization (39,843) (35,342) Total Property and Equipment, Net $ 31,296 $ 15,273 Depreciation and amortization expense for Property and Equipment for the years ended December 31, 2019, 2018 and 2017 was $7.4 million , $9.6 million and $11.0 million, respectively. These expenses are included in "General and Administrative" expenses on the Con solidated Statements of Operations. Prosper capitalized internal-use software and website development costs in the amount of $9.3 million, $5.7 million and $3.7 million for the years ended December 31, 2019, 2018 and 2017, respectively. Impairment charges were not material for years ended December 31, 2019, 2018 and 2017. Additionally, disclosures around the operating lease right-of-use ass ets are included in Note 18. |
Prosper Funding LLC | |
Entity Information [Line Items] | |
Property and Equipment, Net | Property and Equipment Property and Equipment consist of the following (in thousands): December 31, 2019 2018 Internal-use software and web site development costs $ 24,930 $ 22,505 Less: Accumulated depreciation and amortization (17,381) (16,079) $ 7,549 $ 6,426 |
Borrower Loans and Notes, at Fa
Borrower Loans and Notes, at Fair Value | 12 Months Ended |
Dec. 31, 2019 | |
Entity Information [Line Items] | |
Borrower Loans and Notes, at Fair Value | Borrower Loans, Loans Held for Sale and Notes, at Fair Value The fair value of the Borrower Loans originated and Notes issued through the Note Channel is estimated using discounted cash flow methodologies based upon a set of valuation assumptions. The primary assumptions used to value such Borrower Loans and Notes include default rates and recoveries derived from historical performance, market conditions and discount rates applied to each credit grade based on the perceived credit risk of each credit grade. The obligation to pay principal and interest on any series of notes is equal to the payments, if any, received on the corresponding borrower loan, net of the servicing fee. As such, the fair value of the Notes is approximately equal to the fair value of the Borrower Loans originated through the Note Channel, adjusted for the servicing fee and the timing of borrower payments subsequently disbursed to the note holders. The effective interest rate associated with any series of notes will be less than the interest rate earned on the corresponding borrower loan due to the servicing fee. In 2019, Prosper began financing the purchase of Borrower Loans through the Whole Loan Channel through securitization transactions. Associated securitization trusts are deemed consolidated VIEs, and as a result the Borrower Loans held in the securitization trusts are included in “Borrower Loans, at Fair Value” in the Consolidated Balance Sheets. See Note 7 - Securitization for additional information. At December 31, 2019, $388.9 million in Borrower Loans at fair value are held in the consolidated securitization trusts. The fair value of Borrower Loans is estimated using discounted cash flow methodologies based upon a set of valuation assumptions. The primary assumptions used to value such borrower loans include default and prepayment rates derived from historical performance and discount rates based on the rates of return that investors would require when investing in financial instruments with similar characteristics. In 2018, Prosper Warehouse I Trust (“PWIT”), a consolidated VIE, began purchasing Loans Held for Sale from the Company through a warehouse arrangement with a national banking association. Similarly, Prosper Warehouse II Trust (“PWIIT”) began purchasing such loans in 2019 (collectively “Warehouse Loans”). See Note 11 - Debt for more details. Prosper utilizes Warehouse Lines to finance Loans Held for Sale that may be subsequently contributed to securitization transactions or sold to investors. The fair value of the Loans Held for Sale is estimated using the same methodology as the one utilized for Borrower Loans valuation. As of December 31, 2019 and 2018, Borrower Loans and Loans Held for Sale, both at fair value, were as follows (in thousands): Borrower Loans Loans Held for Sale 2019 2018 2019 2018 Aggregate principal balance outstanding $ 647,209 $ 269,093 $ 143,261 $ 185,657 Fair value adjustments (13,190) (5,571) (1,235) (1,869) Fair value $ 634,019 $ 263,522 $ 142,026 $ 183,788 As of December 31, 2019 and 2018, Notes, at Fair Value, was as follows (in thousands): Notes 2019 2018 Aggregate principal balance outstanding $ 250,281 $ 272,430 Fair value adjustments (6,110) (8,427) Fair value 244,171 $ 264,003 Borrower Loans At December 31, 2019, outstanding Borrower Loans had original maturities of either 36 months or 60 months, had monthly payments with fixed interest rates ranging from 5.31% to 31.92% and had various maturity dates through December 2024. At December 31, 2018, outstanding Borrower Loans had original terms between 36 months and 60 months, had monthly payments with fixed interest rates ranging from 5.31% to 31.92% and had various maturity dates through December 2023. As of December 31, 2019, the Borrower Loans that were 90 days or more delinquent had an aggregate principal amount of $6.5 million and a fair value of $1.9 million. As of December 31, 2018, the Borrower Loans that were 90 days or more delinquent had an aggregate principal amount of $2.5 million and a fair value of $1.1 million. We place loans on non- accrual status when they are over 120 days past due. As of December 31, 2019 and 2018, Borrower Loans in non-accrual status had a fair value of $0.7 million and $0.3 million, respectively. Loans Held for Sale At December 31, 2019, outstanding Loans Held for Sale had original maturities between 36 months and 60 months, had monthly payments with fixed interest rates rangin g from 5.31% to 31.82% and had various maturity dates through December 2024. Fair value adjustments recorded in earnings on loans invested in by Prosper during 2019 was a net loss of $1.2 million. Interest income earned on Loans Held for Sale by the Company during 2019 was $19.0 million. As of December 31, 2019, Loans Held for S ale that were 90 days or more delinquent, had an aggregate principal amount of $0.7 million and a fair value of $0.2 million . PMI places loans on non-accrual status when they are over 120 days past due. As of December 31, 2019, Loans Held for Sale in non-accrual status had a fair value of $0.1 million. At December 31, 2018, outstanding Loans Held for Sale had original maturities between 36 months and 60 months had monthly payments with fixed interest rates rangin g from 5.31% to 31.82% and had various maturity dates through December 2023. Fair value adjustments recorded in earnings on loans invested in by Prosper during 2018 was a net loss of $1.9 million. Interest income earned on Loans Held for Sale by the Company during 2018 was $14.1 million. As of December 31, 2018, Loans Held for S ale that were 90 days or more delinquent, had an aggregate principal amount of $0.8 million and a fair value of $0.3 million . PMI places loans on non-accrual status when they are 120 days past due. |
Prosper Funding LLC | |
Entity Information [Line Items] | |
Borrower Loans and Notes, at Fair Value | Borrower Loans and Notes, at Fair Value The fair value of Borrower Loans and Notes issued through the Note Channel is estimated using discounted cash flow methodologies based upon a set of valuation assumptions. The primary assumptions used to value such Borrower Loans and Notes include default rates derived from historical performance and discount rates that reflect estimates of the rates of return that investors would require when investing in financial instruments with similar characteristics. The obligation to pay principal and interest on any series of Notes is equal to the payments, if any, received on the corresponding borrower loan, net of the servicing fee. As such, the fair value of Notes is approximately equal to the fair value of Borrower Loans originated through the Note Channel, adjusted for the servicing fee and the timing of borrower payments subsequently disbursed to the note holders. The effective interest rate associated with a series of notes will be less than the interest rate earned on the corresponding borrower loan due to the servicing fee. Borrower Loans The fair values of Borrower Loans were as follows (in thousands): December 31, 2019 2018 Aggregate principal balance outstanding $ 248,702 $ 269,093 Fair value adjustments (3,565) (5,571) $ 245,137 $ 263,522 At December 31, 2019, Borrower Loans had original maturities of either 36 or 60 months, had monthly payments with fixed interest rates ranging from 5.31% to 31.92% and had various maturity dates through December 2024. At December 31, 2018, Borrower Loans had original maturities of either 36 or 60 months, had monthly payments with fixed interest rates ranging from 5.31% to 31.92% and had various maturity dates through December 2023. Within the change in fair value of Borrower Loans, Prosper Funding recorded a loss of approximately $2.9 million and $0.8 million that is attributable to changes in the credit risks related to Borrower Loans during the years ending December 31, 2019 and 2018, respectively. As of December 31, 2019, Borrower Loans that were 90 days or more delinquent had an aggregate principal amount of $2.6 million and a fair value of $0.8 million. As of December 31, 2018, Borrower Loans that were 90 days or more delinquent had an aggregate principal amount of $2.5 million and a fair value of $1.1 million. Prosper Funding places loans on non-accrual status when they are over 120 days past due. As of December 31, 2019 and 2018, Borrower Loans in non-accrual status had a fair value of $0.3 million and $0.3 million, respectively. Notes The fair values of Notes were as follows (in thousands): December 31, 2019 2018 Aggregate principal balance outstanding $ 250,281 $ 272,430 Fair value adjustments (6,110) (8,427) $ 244,171 $ 264,003 |
Loan Servicing Assets and Liabi
Loan Servicing Assets and Liabilities | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Entity Information [Line Items] | ||
Loan Servicing Assets and Liabilities | Loan Servicing Assets and Liabilities Prosper accounts for Servicing Assets and Liabilities at their estimated fair values with changes in fair values recorded in Servicing Fees. The initial asset or liability is recognized when Prosper sells Borrower Loans to unrelated third-party buyers through the Whole Loan Channel and the servicing rights are retained. The Servicing Assets and liabilities are measured at fair value throughout the servicing period. The total gains and losses recognized on the sale of such Borrower Loans for the year ended December 31, 2019 were a gain of $10.9 million recognized in Gain on Sale of Borrower Loans and a loss of $17.6 million recognized in “Fair Value of Warrants Vested on Sale of Borrower Loans” on the Consolidated Statement of Operations. The total gains and losses recognized on the sale of such Borrower Loans for the year ended December 31, 2018 were a gain of $13.1 million recognized in Gain on Sale of Borrower Loans and a loss of $72.3 million recognized in “Fair Value of Warrants Vested on Sale of Borrower Loans” on the Consolidated Statement of Operations. The total gains and losses recognized on the sale of such Borrower Loans for the year ended December 31, 2017 were a gain of $11.4 million recognized in Gain on Sale of Borrower Loans and a loss of $60.1 million recognized in Fair Value of Warrants Vested on Sale of Borrower Loans on the Consolidated Statement of Operations. As of December 31, 2019, Borrower Loans that were sold, but for which Prosper retained servicing rights, had a total outstanding principal balance of $3.1 billion, original terms of either 36 months or 60 months, monthly payments with fixed interest rates ranging from 5.31% to 31.92%, and various maturity dates through December 2024. At December 31, 2018, Borrower Loans that were sold, but for which Prosper retained servicing rights, had a total outstanding principal balance of $3.6 billion, original terms of either 36 months or 60 months, monthly payments with fixed interest rates ranging from 5.31% to 35.52%, and various maturity dates through December 2023. $38.4 million, $43.1 million and $39.0 million of contractually specified Servicing Fees and ancillary fees are included on the Consolidated Statements of Operations in “Servicing Fees, Net” for the years ended December 31, 2019, 2018 and 2017, respectively. Fair Value Valuation Method Prosper uses a discounted cash flow valuation methodology generally consisting of developing an estimate of future cash flows that are expected to occur over the life of a financial instrument and then discounts those cash flows at a rate of return that results in the fair value amount. Significant unobservable inputs presented in the table within Note 8 below are those that Prosper considers significant to the estimated fair values of the Level 3 Servicing Assets and liabilities. The following is a description of the significant unobservable inputs provided in the table. Market Servicing Rate Management estimates adequate market servicing rates that would fairly compensate a substitute servicer should one be required, which includes the profit that would be demanded in the marketplace. This rate is stated as a fixed percentage of outstanding principal balance on a per annum basis. Management estimates market servicing rates based on observable market rates for other loan types in the industry and on observing bids from sub-servicing providers, adjusted for the unique loan attributes that are present in the specific loans that Prosper sells and services, and from information from backup service providers. Discount Rate The discount rate is a rate of return used to discount future expected cash flows to arrive at a present value, which represents the fair value of the loan servicing rights. Management uses a range of discount rates for the Servicing Assets and Liabilities based on comparable observed valuations of similar assets and publicly available disclosures related to servicing valuations, with comparability adjustments made to account for differences with Prosper’s Servicing Assets. Default Rate The default rate presented in Note 8 is an annualized, average estimate considering all Borrower Loan categories (i.e. risk ratings and duration), and represents an aggregate of conditional default rate curves for each credit grade or Borrower Loan category. Each point on a particular Borrower Loan category’s curve represents the percentage of principal expected to default per period based on the term and age of the underlying Borrower Loans. The assumption regarding defaults directly reduces servicing revenues because the amount of servicing revenues received is based on the amount collected each period. Prepayment Rate The prepayment rate presented in Note 8 is an annualized, average estimate considering all Borrower Loan categories (i.e. risk ratings and duration), and represents an aggregate of conditional prepayment rate curves for each credit grade or Borrower Loan category. Each point on a particular Borrower Loan category’s curve represents the percentage of principal expected to prepay per period based on the term and age of the underlying Borrower Loans. Prepayments reduce servicing revenues as they shorten the period over which PFL expects to collect fees on the Borrower Loans, which is used to project future servicing revenues. | |
Prosper Funding LLC | ||
Entity Information [Line Items] | ||
Loan Servicing Assets and Liabilities | Loan Servicing Assets and Liabilities Prosper Funding accounts for Servicing Assets and Liabilities at their estimated fair values with changes in fair values recorded in Servicing Fees, Net on the Consolidated Statements of Operations. The initial asset or liability is recognized when Prosper Funding sells Borrower Loans to unrelated third-party buyers through the Whole Loan Channel and the servicing rights are retained. The total recognized gains and losses on the sale of such Borrower Loans were a $5.1 million loss, a $58.0 million loss and a $48.7 million loss for the years ended December 31, 2019, 2018, and 2017, respectively. At December 31, 2019, Borrower Loans that were sold, but for which Prosper Funding retained servicing rights, had a total outstanding principal balance of $3.7 billion, original terms of either 36 or 60 months, monthly payments with fixed interest rates ranging from 5.31% to 31.92% and various maturity dates through December 2024. At December 31, 2018, Borrower Loans that were sold, but for which Prosper Funding retained servicing rights, had a total outstanding principal balance of $3.7 billion, original terms of either 36 or 60 months, monthly payments with fixed interest rates ranging from 5.31% to 35.52% and various maturity dates through December 2023. $43.4 million, $44.0 million and $38.5 million of contractually specified Servicing Fees, late charges and ancillary fees are included in our Statement of Operations in Servicing Fees, Net for the years ended December 31, 2019, 2018, and 2017, respectively. Fair Value Valuation Method Prosper Funding uses a discounted cash flow valuation methodology generally consisting of developing an estimate of future cash flows that are expected to occur over the life of a financial instrument and then discounting those cash flows at a rate of return that results in the fair value amount. Significant unobservable inputs presented in the table within Note 7 are those that Prosper Funding considers significant to the estimated fair values of the Level 3 Servicing Assets and Liabilities. The following is a description of the significant unobservable inputs provided in the table. Market Servicing Rate Prosper Funding estimates adequate market servicing rates that would fairly compensate a substitute servicer should one be required, which includes the profit that would be demanded in the marketplace. This rate is stated as a fixed percentage of outstanding principal balance on a per annum basis. Prosper Funding estimates these market servicing rates based on observable market rates for other loan types in the industry and bids from sub-servicing providers, adjusted for the unique loan attributes that are present in the specific loans that Prosper Funding sells and services and information from a backup service providers. Discount Rate The discount rate is a rate of return used to discount future expected cash flows to arrive at a present value, which represents the fair value of the loan servicing rights. Management used a range of discount rates for the Servicing Assets and liabilities based on comparable observed valuations of similar assets and publicly available disclosures related to servicing valuations, with comparability adjustments made to account for differences with Prosper Funding’s Servicing Assets. Default Rate The default rate presented in Note 7 is an annualized, average estimate considering all Borrower Loan categories (i.e., risk ratings and duration), and represents an aggregate of conditional default rate curves for each credit grade or borrower loan category. Each point on a particular borrower loan category’s curve represents the percentage of principal expected to default per period based on the term and age of the underlying Borrower Loans. The assumption regarding defaults directly reduces servicing revenues because the amount of servicing revenues received is based on the amount collected each period. Prepayment Rate The prepayment rate presented in Note 7 is an annualized, average estimate considering all borrower loan categories (i.e., risk ratings and duration), and represents an aggregate of conditional prepayment rate curves for each credit grade or borrower loan category. Each point on a particular borrower loan category’s curve represents the percentage of principal expected to prepay per period based on the term and age of the underlying Borrower Loans. Prepayments reduce servicing revenues as they shorten the period over which Prosper Funding expects to collect fees on the Borrower Loans, which is used to project future servicing revenues. |
Available for Sale Investments,
Available for Sale Investments, at Fair Value | 12 Months Ended |
Dec. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Available for Sale Investments, at Fair Value | Available for Sale Investments, at Fair Value Available for sale investments are recorded at fair value and unrealized gains and losses are reported, net of taxes, in "Accumulated Other Comprehensive Loss " included in stockholders' equity unless management determines that an investment is other-than-temporarily impaired. Prosper did not hold Available for Sale Investments as of the year ended December 31, 2019, nor did Prosper sell any Available for Sale Investments during the year ended December 31, 2019. The amortized cost, gross unrealized gains and losses and fair value of Available for Sale Investments for the year ended December 31, 2018 are as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value December 31, 2018 Fixed maturity securities: Treasury Bills $ 17,940 $ — $ (3) $ 17,937 US Treasury securities $ 4,246 $ — $ (10) $ 4,236 $ 22,186 $ — $ (13) $ 22,173 |
Securitization
Securitization | 12 Months Ended |
Dec. 31, 2019 | |
Transfers and Servicing [Abstract] | |
Securitizations | SecuritizationsDuring 2019, Prosper co-sponsored securitizations of unsecured personal whole loans facilitated through our marketplace with outstanding principal balance of $573.0 million through three securitization trusts (PMIT 2019-1, PMIT 2019-2, and PMIT 2019-4). Each securitization trust issued senior notes, a risk retention interest and residual certificates to finance the purchase of Borrower Loans. The risk retention interest represents the right to receive 5.0% of all amounts collected on the Borrower Loans held by the securitization trusts. The resulting senior notes were sold to third party investors. Prosper retained 65.5%, 16.4%, and 19.6% of the residual certificates issued by PMIT 2019-1, PMIT 2019-2, and PMIT 2019-4, respectively. The remaining residual certificates and all the risk retention interests are held by third-party investors. In addition to the retained residual certificates, Prosper's continued involvement includes loan servicing responsibilities over the life of the underlying loans. PMIT 2019-1, 2019-2 and 2019-4 are deemed VIEs. Prosper consolidated the VIEs as the primary beneficiary because Prosper, through its role as the servicer, has both the power to direct the activities that most significantly affect the VIEs' economic performance and a variable interest that could potentially be significant to the VIEs through holding the retained residual certificates. In evaluating whether Prosper is the primary beneficiary, management considers both qualitative and quantitative factors regarding the nature, size and form of our involvement with the VIEs. Management assesses whether Prosper is the primary beneficiary of the VIEs on an on-going basis. For these VIEs, the creditors have no recourse to the general credit of Prosper and the liabilities of the VIEs can only be settled by the respective VIEs' assets. Additionally, the assets of the VIEs can be used only to settle obligations of the VIEs. Because Prosper consolidates the securitization trusts, the loans held in the securitization trusts are included in “Borrower Loans, at Fair Value”, the notes sold to third party investors recorded in “Notes Issued by Securitization Trust”, and the risk retention interests and residual certificates held by third party investors in “Certificates Issued by Securitization Trust, at Fair Value” in the Consolidated Balance Sheets. PMIT 2019-1 The notes under the PMIT 2019-1 securitization were issued in three classes: Class A in the amount of $127.3 million, Class B in the amount of $25.0 million, and Class C in the amount of $19.3 million (collectively, the “2019-1 Notes”). The Class A, Class B and Class C notes bear interest at a fixed rate of 3.54%, 4.03% and 5.27%, respectively. Principal and interest payments began in March 2019 and are payable monthly. These notes are recorded at amortized cost on the balance sheet. The associated debt issuance costs of $2.3 million are deferred and amortized into interest expense over the contractual life of the notes. The notes held by third-party investors and the unamortized debt issuance costs are included in Notes Issued by Securitization Trust with a balance of $94.2 million and are secured by Borrower Loans with a fair value of $104.2 million as of December 31, 2019. The risk retention interest and residual certificates held by third party investors at fair value of $9.8 million are included in “Certificates Issued by Securitization Trust, at Fair Value” in the Consolidated Balance Sheets as of December 31, 2019. PMIT 2019-2 The notes under the PMIT 2019-2 securitization were issued in three classes: Class A in the amount of $110.1 million, Class B in the amount of $31.4 million and Class C in the amount of $32.7 million (collectively, the “2019-2 Notes”). The Class A, Class B and Class C notes bear interest at a fixed rate of 3.20%, 3.69% and 5.05%, respectively. Principal and interest payments began in July 2019 and are payable monthly. These notes are recorded at amortized cost on the balance sheet. The associated debt issuance costs of $1.9 million are deferred and amortized into interest expense over the contractual life of the notes. The notes held by third-p arty investors and the unamortized debt issuance costs are included in Notes Issued by Securitization Trust with a balance of $122.0 million and are secured by Borrower Loans with a fair value of $138.5 million as of December 31, 2019. The risk retention interest and residual certificates held by third party investors at fair value of $21.5 million are included in “Certificates Issued by Securitization Trust, at Fair Value” in the Consolidated Balance Sheets as of December 31, 2019. PMIT 2019-4 The notes under the PMIT 2019-4 securitization were issued in three classes: Class A in the amount of $102.6 million, Class B in the amount of $19.5 million and Class C in the amount of $16.8 million (collectively, the “2019-4 Notes”). The Class A, Class B and Class C notes bear interest at a fixed rate of 2.48%, 3.20% and 4.95% respectively. Principal and interest payments began in December 2019 and are payable monthly. These notes are recorded at amortized cost on the balance sheet. The associated debt issuance costs of $1.2 million are deferred and amortized into interest expense over the contractual life of the notes. The notes held by third-p arty investors and the unamortized debt issuance costs are included in Notes Issued by Securitization Trust with a balance of $131.4 million and are secured by Borrower Loans with a fair value of $146.1 million as of December 31, 2019. The risk retention interest and residual certificates held by third party investors at fair value of $20.8 million are included in “Certificates Issued by Securitization Trust, at Fair Value” in the Consolidated Balance Sheets as of |
Fair Value of Assets and Liabil
Fair Value of Assets and Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Entity Information [Line Items] | |
Fair Value of Assets and Liabilities | Fair Value of Assets and Liabilities For a description of the fair value hierarchy and Prosper’s fair value methodologies, see Note 2 - Summary of Significant Accounting Policies. Prosper did not transfer any assets or liabilities in or out of Level 3 during the year ended December 31, 2019 or 2018. Financial Instruments Recorded at Fair Value The fair value of the Borrower Loans, Loans Held for Sale, Notes, Certificates Issued by Securitization Trust, servicing rights and loan trailing fee liability are estimated using discounted cash flow methodologies based upon a set of valuation assumptions. The primary assumptions used in the discounted cash flow model include default and prepayment rates derived from historical performance and discount rates applied to each credit grade based on the perceived credit risk of each credit grade. Investments held at fair value consist of Available for Sale Investments. When available, management uses quoted prices in active markets to measure the fair value of Available for Sale Investments. When utilizing market data and bid-ask spreads, Prosper uses the price within the bid-ask spread that best represents fair value. When quoted prices do not exist, Prosper uses prices obtained from independent third-party pricing services to measure the fair value of investment assets. Prosper's primary independent pricing service provides prices based on observable trades and discounted cash flows that incorporate observable information, such as yields for similar types of securities (a benchmark interest rate plus observable spreads) and weighted-average maturity for the same or similar securities. The Company compares the prices obtained from its primary independent pricing service to the prices obtained from the additional independent pricing services to determine if the price obtained from the primary independent pricing service is reasonable. The Company does not adjust the prices received from independent third-party pricing services unless such prices are inconsistent with the definition of fair value and result in a material difference in the recorded amounts. The Convertible Preferred Stock Warrant Liability is valued using a Black-Scholes option pricing model. Refer to Note 13 for additional information. The following tables present the fair value hierarchy for assets and liabilities measured at fair value (in thousands): December 31, 2019 Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Assets: Borrower Loans $ — $ — $ 634,019 $ 634,019 Loans Held for Sale — — 142,026 142,026 Available for Sale Investments — — — — Servicing Assets — — 12,602 12,602 — — 788,647 788,647 Liabilities: Notes $ — $ — $ 244,171 $ 244,171 Servicing Liabilities — — — — Certificates Issued by Securitization Trust — — 52,168 52,168 Convertible Preferred Stock Warrant Liability — — 149,996 149,996 Loan Trailing Fee Liability — — 2,997 2,997 $ — $ — $ 449,332 $ 449,332 December 31, 2018 Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Assets: Borrower Loans $ — $ — $ 263,522 $ 263,522 Loans Held for Sale — — 183,788 183,788 Available for Sale Investments — 22,173 — 22,173 Servicing Assets — — 14,687 14,687 — 22,173 461,997 484,170 Liabilities: Notes $ — $ — $ 264,003 $ 264,003 Servicing Liabilities — — 12 12 Convertible Preferred Stock Warrant Liability — — 143,679 143,679 Loan Trailing Fee Liability — — 3,118 3,118 $ — $ — $ 410,812 $ 410,812 As Prosper’s Borrower Loans, Loans Held for Sale, Notes, Certificates Issued by Securitization Trust, Convertible Preferred Stock Warrant Liability, and loan servicing rights do not trade in an active market with readily observable prices, the Company uses significant unobservable inputs to measure the fair value of these assets and liabilities. Financial instruments are categorized in the Level 3 valuation hierarchy based on the significance of unobservable factors in the overall fair value measurement. These fair value estimates may also include observable, actively quoted components derived from external sources. As a result, gains and losses for assets and liabilities within the Level 3 category may include changes in fair value that were attributable to both observable and unobservable inputs. Significant Unobservable Inputs The following tables present quantitative information about the range of significant unobservable inputs used for the Company’s Level 3 fair value measurements at December 31, 2019: December 31, 2019 2018 Borrower Loans, Loans Held for Sale, and Notes Discount rate 4.4 % — 12.2 % 4.7 % — 13.8 % Default rate 2.1 % — 18.6 % 2.0 % — 15.8 % December 31, 2019 Certificates Issued by Securitization Trust Discount rate 4.0 % — 15.0 % Default rate 2.0 % — 17.0 % Prepayment rate 14.5 % — 33.0 % December 31, 2019 2018 Servicing Rights Discount rate 15.0 % — 25.0 % 15.0 % — 25.0 % Default rate 1.7 % — 18.8 % 1.6 % — 16.7 % Prepayment rate 16.5 % — 28.1 % 15.5 % — 25.1 % Market servicing rate (1) 0.625 % 0.625 % (1) Excludes collection fees that would be passed on to a hypothetical third-party servicer. As of December 31, 2019 and 2018, the market rate for collection fees and non-sufficient fund fees was assumed to be 6 basis points and 8 basis points, respectively, for a weighted-average total market servicing rate of 68.5 basis points and 70.5 basis points respectively. December 31, 2019 2018 Loan Trailing Fee Liability Discount rate 15.0 % — 25.0 % 15.0 % — 25.0 % Default rate 1.7 % — 18.8 % 1.6 % — 16.7 % Prepayment rate 16.5 % — 28.1 % 15.5 % — 25.1 % At December 31, 2019 and 2018, the discounted cash flow methodology used to estimate the Note fair values used the same projected cash flows as the related Borrower Loans. Changes in Level 3 Fair Value Assets and Liabilities on a Recurring Basis The following table presents additional information about Level 3 Loans Held for Sale, Borrower Loans, and Notes measured at fair value on a recurring basis for the year ended December 31, 2019 and 2018 (in thousands): Assets Liabilities Loans Held for Sale Borrower Loans Notes Total Fair Value at January 1, 2018 $ 49 $ 293,005 $ (293,948) $ (894) Additions - Purchases, Issuances 2,365,431 177,101 (176,830) 2,365,702 Principal repayments (43,169) (171,427) 175,760 (38,836) Borrower Loans sold to third parties (2,135,329) (3,690) — (2,139,019) Other changes 1,422 (202) 441 1,661 Change in fair value (4,616) (31,265) 30,574 (5,307) Fair Value at December 31, 2018 183,788 263,522 (264,003) 183,307 Additions - Purchases, Issuances 2,320,560 561,711 (171,138) 2,711,133 Transfers in (Transfers out) (178,924) 178,924 — — Principal repayments (68,857) (313,909) 167,419 (215,347) Borrower Loans sold to third parties (2,108,231) (5,417) — (2,113,648) Other changes 584 33 739 1,356 Change in fair value (6,894) (50,845) 22,812 (34,927) Fair Value at December 31, 2019 $ 142,026 $ 634,019 $ (244,171) $ 531,874 The following table presents additional information about Level 3 Servicing Assets measured at fair value on a recurring basis for the year ended December 31, 2019 and 2018 (in thousands): Servicing Assets Fair Value at January 1, 2018 $ 14,711 Additions 13,171 Loss in fair value (13,195) Fair Value at December 31, 2018 $ 14,687 Additions 11,925 Derecognition (1,522) Loss in fair value (12,488) Fair Value at Fair Value at December 31, 2019 $ 12,602 The following tables present additional information about Level 3 Certificates Issued by Securitization Trust measured at fair value on a recurring basis for the year ended December 31, 2019 and 2018 (in thousands): Certificates Issued by Securitization Trust Fair Value at December 31, 2018 — Additions - Purchases, Issuances 72,917 Principal repayments (13,770) Borrower Loans sold to third parties — Other changes 642 Change in fair value (7,621) Fair Value at December 31, 2019 $ 52,168 The following tables present additional information about Level 3 Convertible Preferred Stock Warrant Liability measured at fair value on a recurring basis for the year ended December 31, 2019 and 2018 (in thousands): Convertible Preferred Stock Warrant Liability Fair Value at January 1, 2018 $ 116,366 Issuance of Stock Warrants 72,316 Change in fair value (45,003) Fair Value at December 31, 2018 $ 143,679 Issuance of Stock Warrants 17,552 Change in fair value (11,235) Fair Value at December 31, 2019 $ 149,996 Loan Trailing Fee The fair value of the Loan Trailing Fee represents the present value of the expected monthly Loan Trailing Fee payments, which takes into consideration certain assumptions related to expected prepayment rates and default rates using a discounted cash flow model. The following table presents additional information about level 3 Loan Trailing Fee Liability measured at fair value on a recurring basis (in thousands): Loan Trailing Fee Liability Balance as of January 1, 2018 $ 2,595 Issuances 2,524 Cash payment of Loan Trailing Fee (2,494) Change in fair value 493 Balance at December 31, 2018 $ 3,118 Issuances 2,254 Cash payment of Loan Trailing Fee (2,660) Change in fair value 285 Balance at December 31, 2019 $ 2,997 Significant Recurring Level 3 Fair Value Asset and Liability Assumptions and Input Sensitivity Key economic assumptions are used to compute the fair value of Borrower Loans and Loans Held for Sale, Notes and Certificates Issued by Securitization Trust that are presented in the table below. The sensitivity of the current fair value to immediate changes in assumptions at December 31, 2019 for Borrower Loans combined with Loans Held for Sale and for Notes funded through the Note Channel are presented in the following table (in thousands, except percentages): Borrower Loans and Notes Fair value at December 31, 2019, using the following assumptions: $ 776,045 $ 244,171 Weighted-average discount rate 7.00 % 6.43 % Weighted-average default rate 12.63 % 13.68 % Fair value resulting from: 100 basis point increase in discount rate $ 768,924 $ 241,927 200 basis point increase in discount rate $ 761,971 $ 239,737 Fair value resulting from: 100 basis point decrease in discount rate $ 783,344 $ 246,471 200 basis point decrease in discount rate $ 790,823 $ 248,828 Fair value resulting from: 100 basis point increase in default rate $ 765,894 $ 240,958 200 basis point increase in default rate $ 756,007 $ 237,831 Fair value resulting from: 100 basis point decrease in default rate $ 786,541 $ 247,489 200 basis point decrease in default rate $ 797,065 $ 250,817 The sensitivity of the current fair value to immediate changes in assumptions at December 31, 2019 for Certificates Issued by Securitization Trust is presented in the following table (in thousands, except percentages): Certificates Issued by Securitization Trust Fair value at December 31, 2019, using the following assumptions: $ 52,168 Weighted-average discount rate 9.59 % Weighted-average default rate 10.12 % Weighted-average prepayment rate 21.41 % Fair value resulting from: 100 basis point increase in discount rate $ 51,813 200 basis point increase in discount rate $ 51,466 Fair value resulting from: 100 basis point decrease in discount rate $ 52,533 200 basis point decrease in discount rate $ 52,909 Fair value resulting from: 100 basis point increase in default rate $ 48,986 200 basis point increase in default rate $ 45,926 Fair value resulting from: 100 basis point decrease in default rate $ 55,369 200 basis point decrease in default rate $ 58,613 Fair value resulting from: 100 basis point increase in prepayment rate $ 52,085 200 basis point increase in prepayment rate 52,008 Fair value resulting from: 100 basis point decrease in prepayment rate $ 52,253 200 basis point decrease in prepayment rate $ 52,340 Key economic assumptions are used to compute the fair value of Servicing Assets and are presented in the table below. The sensitivity of the current fair value to immediate changes in assumptions at December 31, 2019 for Servicing Assets is presented in the following table (in thousands, except percentages): Servicing Assets Fair value at December 31, 2019, using the following assumptions: $ 12,602 Market servicing rate 0.625 % Weighted-average prepayment rate 20.99 % Weighted-average default rate 12.67 % Fair value resulting from: Market servicing rate increase to 0.65% $ 11,825 Market servicing rate decrease to 0.60% $ 13,387 Fair value resulting from: Applying a 1.1 multiplier to prepayment rate $ 12,348 Applying a 0.9 multiplier to prepayment rate $ 12,868 Fair value resulting from: Applying a 1.1 multiplier to default rate $ 12,377 Applying a 0.9 multiplier to default rate $ 12,840 These sensitivities are hypothetical and should be evaluated with care. The effect on fair value of a variation in assumptions generally cannot be determined because the relationship of the change in assumptions to the fair value may not be linear. Additionally, the impact of a variation in a particular assumption on the fair value is calculated while holding other assumptions constant. In reality, changes in one factor may lead to changes in other factors, which could impact the above hypothetical effects. Assets and Liabilities Not Recorded at Fair Value The following tables present the fair value hierarchy for assets and liabilities not recorded at fair value (in thousands): December 31, 2019 Carrying Amount Level 1 Inputs Level 2 Inputs Level 3 Inputs Fair Value Assets Cash and Cash Equivalents $ 64,635 $ 64,635 $ — $ — $ 64,635 Restricted Cash 155,773 — 155,773 — 155,773 Accounts Receivable 1,695 — 1,695 — 1,695 222,103 64,635 157,468 — 222,103 Liabilities Accounts Payable and Accrued Liabilities $ 19,937 — 19,937 — $ 19,937 Payable to Investors 101,092 — 101,092 — 101,092 Notes Issued by Securitization Trust 347,662 — 353,028 — 353,028 Warehouse Lines 131,583 — 131,090 — 131,090 $ 600,274 $ — $ 605,147 $ — $ 605,147 December 31, 2018 Carrying Amount Level 1 Inputs Level 2 Inputs Level 3 Inputs Fair Value Assets Cash and Cash Equivalents $ 57,945 57,945 — — $ 57,945 Restricted Cash 149,114 — 149,114 — 149,114 Accounts Receivable 5,119 — 5,119 — 5,119 212,178 57,945 154,233 — 212,178 Liabilities Accounts Payable and Accrued Liabilities $ 19,967 — 19,967 — $ 19,967 Payable to Investors 127,538 — 127,538 — 127,538 Warehouse Lines 162,488 — 162,488 — 162,488 $ 309,993 — 309,993 — $ 309,993 |
Prosper Funding LLC | |
Entity Information [Line Items] | |
Fair Value of Assets and Liabilities | Fair Value of Assets and Liabilities Prosper Funding has elected to record certain financial instruments at fair value on the balance sheet. Prosper Funding classifies Borrower Loans, Loans Held for Sale and Notes as financial instruments and assesses their fair value each on a quarterly basis for financial statement presentation purposes. Gains and losses on these financial instruments are shown separately on the Consolidated Statements of Operations. At December 31, 2019 and 2018, the discounted cash flow methodology used to estimate the Note fair values used the same projected cash flows as the related Borrower Loans. As demonstrated in the following table, the fair value adjustments for Borrower Loans were largely offset by the fair value adjustments of the Notes due to the borrower payment dependent design of the Notes and because the principal balances of the Borrower Loans approximated the principal balances of the Notes. For a description of the fair value hierarchy and Prosper Funding’s fair value methodologies, see Note 2 - Summary of Significant Accounting Policies. Prosper Funding did not transfer any assets or liabilities in or out of Level 3 during the year ended December 31, 2019 and 2018. Financial Instruments Recorded at Fair Value The fair value of the Borrower Loans and Notes are estimated using discounted cash flow methodologies based upon a set of valuation assumptions. The primary cash flow assumptions used to value such Borrower Loans and Notes include default rates derived from historical performance and discount rates that reflect estimates of the rates of return that investors would require when investing in financial instruments with similar characteristics. The following tables present the fair value hierarchy for assets and liabilities measured at fair value (in thousands): December 31, 2019 Level 1 Inputs Level 2 Inputs Level 3 Inputs Fair Value Assets Borrower Loans $ — $ — $ 245,137 $ 245,137 Servicing Assets — — 14,888 14,888 — — 260,025 260,025 Liabilities Notes $ — $ — $ 244,171 $ 244,171 Servicing Liabilities — — — — Loan Trailing Fee Liability — — 2,997 2,997 $ — $ — $ 247,168 $ 247,168 December 31, 2018 Level 1 Inputs Level 2 Inputs Level 3 Inputs Fair Value Assets Borrower Loans $ — $ — $ 263,522 $ 263,522 Servicing Assets — — 15,550 15,550 — — 279,072 279,072 Liabilities Notes $ — $ — $ 264,003 $ 264,003 Servicing Liabilities — — 12 12 Loan Trailing Fee Liability — — 3,118 3,118 $ — $ — $ 267,133 $ 267,133 As Prosper Funding’s Borrower Loans, Notes and loan servicing rights do not trade in an active market with readily observable prices, Prosper Funding uses significant unobservable inputs to measure the fair value of these assets and liabilities. Financial instruments are categorized in the Level 3 valuation hierarchy based on the significance of unobservable factors in the overall fair value measurement. These fair value estimates may also include observable, actively quoted components derived from external sources. As a result, the realized and unrealized gains and losses for assets and liabilities within the Level 3 category may include changes in fair value that were attributable to both observable and unobservable inputs. Significant Unobservable Inputs The following tables present quantitative information about the range of significant unobservable inputs used for Prosper Funding’s Level 3 fair value measurements: December 31, 2019 2018 Borrower Loans and Notes Discount rate 4.4 % — 12.1 % 4.7 % — 13.8 % Default rate 2.4 % — 17.7 % 2.0 % — 15.8 % December 31, 2019 2018 Servicing Assets Discount rate 15.0 % — 25.0 % 15.0 % — 25.0 % Default rate 1.7 % — 18.8 % 1.6 % — 16.7 % Prepayment rate 16.5 % — 28.1 % 15.5 % — 25.1 % Market servicing rate (1) 0.625 % 0.625 % (1) Excludes collection fees that would be passed on to a hypothetical third-party servicer. As of December 31, 2019 and 2018, the market rate for collection fees and non-sufficient fund fees was assumed to be 6 basis points and 8 basis points, respectively, for a weighted-average total market servicing rate of 68.5 basis points and 70.5 basis points respectively. December 31, 2019 2018 Loan Trailing Fee Liability Discount rate 15.0 % — 25.0 % 15.0 % — 25.0 % Default rate 1.7 % — 18.8 % 1.6 % — 16.7 % Prepayment rate 16.5 % — 28.1 % 15.5 % — 25.1 % Changes in Level 3 Fair Value Assets and Liabilities on a Recurring Basis The following table presents additional information about Level 3 Loans Held for Sale, Borrower Loans, and Notes measured at fair value on a recurring basis for the year ended December 31, 2019 and 2018 (in thousands): Assets Liabilities Loans Held for Sale Borrower Loans Notes Total Fair value at January 1, 2018 $ 49 $ 293,005 $ (293,948) $ (894) Originations 2,365,431 177,101 (176,830) 2,365,702 Principal repayments (20) (171,427) 175,760 4,313 Borrower Loans sold to third parties (2,365,450) (3,690) — (2,369,140) Other changes — (202) 441 239 Change in fair value (10) (31,265) 30,574 (701) Fair value at December 31, 2018 $ — $ 263,522 (264,003) $ (481) Originations 2,320,560 170,326 (171,138) 2,319,748 Principal repayments — (162,082) 167,420 5,338 Borrower Loans sold to third parties (2,320,560) (3,399) — (2,323,959) Other changes — (45) 739 694 Change in fair value — (23,185) 22,811 (374) Fair value at December 31, 2019 $ — $ 245,137 $ (244,171) $ 966 The following table presents additional information about Level 3 Servicing Assets measured at fair value on a recurring basis for the year ended December 31, 2019 and 2018 (in thousands): Servicing Assets Fair value at January 1, 2018 $ 14,598 Additions 14,315 Loss in fair value (13,363) Fair value at December 31, 2018 $ 15,550 Additions 13,032 Loss in fair value (13,694) Fair value at December 31, 2019 $ 14,888 The following tables present additional information about Level 3 Loan Trailing Fee Liability measured at fair value on a recurring basis for the year ended December 31, 2019 and 2018 (in thousands): Loan Trailing Fee Liability Fair Value at January 1, 2018 $ 2,595 Issuances 2,524 Cash payment of Loan Trailing Fee (2,494) Loss in fair value 493 Fair Value at December 31, 2018 $ 3,118 Issuances 2,254 Cash payment of Loan Trailing Fee (2,660) Loss in fair value 285 Fair Value at December 31, 2019 $ 2,997 Significant Recurring Level 3 Fair Value Asset and Liability Input Sensitivity Key economic assumptions are used to compute the fair value of Borrower Loans and Notes. The sensitivity of the current fair value to immediate changes in assumptions at December 31, 2019 for Borrower Loans and Notes funded through the Note Channel are presented in the following table (in thousands, except percentages): Borrower Loans Notes Fair Value at December 31, 2019 $ 245,137 $ 244,171 Weighted-average discount rate 6.43 % 6.43 % Weighted-average default rate 13.68 % 13.68 % Fair value resulting from: 100 basis point increase in discount rate $ 242,888 $ 241,927 200 basis point increase in discount rate 240,691 239,737 Fair value resulting from: 100 basis point decrease in discount rate $ 247,442 $ 246,471 200 basis point decrease in discount rate 249,805 248,828 Fair value resulting from: 100 basis point increase in default rate $ 241,930 $ 240,958 200 basis point increase in default rate 238,807 237,831 Fair value resulting from: 100 basis point decrease in default rate $ 248,453 $ 247,489 200 basis point decrease in default rate 251,777 250,817 Key economic assumptions are used to compute the fair value of Servicing Assets. The sensitivity of the current fair value to immediate changes in assumptions at December 31, 2019 for Servicing Assets is presented in the following table (in thousands, except percentages): Servicing Assets Fair Value at December 31, 2019 $ 14,888 Market servicing rate 0.625 % Weighted-average prepayment rate 20.99 % Weighted-average default rate 12.67 % Fair value resulting from: Market servicing rate increase to 0.65% 13,966 Market servicing rate decrease to 0.60% 15,811 Fair value resulting from: Applying a 1.1 multiplier to prepayment rate 14,583 Applying a 0.9 multiplier to prepayment rate 15,197 Fair value resulting from: Applying a 1.1 multiplier to default rate 14,618 Applying a 0.9 multiplier to default rate 15,165 These sensitivities are hypothetical and should be evaluated with care. The effect on fair value of a 10% variation in assumptions generally cannot be determined because the relationship of the change in assumptions to the fair value may not be linear. Additionally, the impact of a variation in a particular assumption on the fair value is calculated while holding other assumptions constant. In reality, changes in one factor may lead to changes in other factors, which could impact the above hypothetical effects. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets, Net | Goodwill and Other Intangible Assets, Net Goodwill Prosper’s Goodwill balance of $36.4 million at December 31, 2019 did not change during the year ended December 31, 2019. The Company recorded no Goodwill impairment for the years ended December 31, 2019, 2018 and 2017. Other Intangible Assets, Net The following table presents the detail of other Intangible Assets subject to amortization for the periods presented (dollars in thousands): Gross Carrying Value Accumulated Amortization Net Carrying Value Remaining Useful Life (In Years) December 31, 2019 Developed technology $ 3,060 $ (3,060) $ — $ — User base and customer relationships 5,050 (4,330) 720 5.3 Brand name 60 (60) — — $ 8,170 $ (7,450) $ 720 Gross Carrying Value Accumulated Amortization Net Carrying Value Remaining Useful Life (In Years) December 31, 2018 Developed technology $ 3,060 $ (3,060) $ — — User base and customer relationships 5,050 (4,051) 999 6.3 Brand name 60 (60) — — $ 8,170 $ (7,171) $ 999 The Company recorded no additional intangibles for the year ended December 31, 2019 or 2018. The user base and customer relationship Intangible Assets are being amortized on an accelerated basis over a three ten three Amortization expense for the years ended December 31, 2019, 2018 and 2017 was $0.3 million, $0.4 million and $1.4 million, respectively. Estimated amortization of purchased Intangible Assets for future periods is as follows (in thousands): |
Other Liabilities
Other Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Other Liabilities [Abstract] | |
Other Liabilities | Other Liabilities Other Liabilities consist of the following (in thousands): December 31, 2019 2018 Loan trailing fee liability $ 2,997 $ 3,118 Deferred revenue 241 396 Loan servicing liabilities — 12 Deferred income tax liability 405 373 Deferred rent — 3,408 Operating lease liabilities 17,507 — Restructuring liability — 2,106 Other 576 1,216 Total Other Liabilities $ 21,726 $ 10,629 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Debt Prosper Warehouse Trust Agreements Prosper’s consolidated VIEs, PWIT and PWIIT (together, “Warehouse VIEs”), each entered into an agreement (together, “Warehouse Agreements”) with certain lenders for committed revolving lines of credit (“Warehouse Lines”) during 2019 and 2018. In connection with the Warehouse Agreements, the Warehouse VIEs each entered into a security agreement with a bank as administrative agent and a national banking association as collateral trustee and paying agent. Proceeds under the Warehouse Lines may only be used to purchase certain unsecured consumer loans and related rights and documents from Prosper and to pay fees and expenses related to the Warehouse Lines. Both Warehouse VIEs are consolidated because Prosper is the primary beneficiary of the VIEs. The creditors of the Warehouse Lines have no recourse to the general credit of Prosper. Additionally, the assets of the VIEs can be used only to settle obligations of the VIEs. The loans held in the Warehouse VIEs are included in “Loans Held for Sale, at Fair Value” and Warehouse Lines are in “Warehouse Lines” in the Consolidated Balance Sheets. Both Warehouse Agreements contain the same certain covenants including restrictions on each Warehouse VIE's ability to incur indebtedness, pledge assets, merge or consolidate and enter into certain affiliate transactions. Each Warehouse Agreement also requires Prosper to maintain a minimum tangible net worth of $25 million, minimum net liquidity of $15 million and a maximum leverage ratio of 5:1. Tangible net worth is defined as the sum of (i) (A) Convertible Preferred Stock, (B) total Stockholders’ Deficit and (C) Convertible Preferred Stock Warrant Liability, less the sum of (ii) (A) goodwill and (B) intangible assets. Net liquidity is defined as the sum of cash, cash equivalents and Available for Sale Investments. The leverage ratio is defined as the ratio of total consolidated indebtedness other than non-recourse securitization indebtedness, non-recourse or limited recourse warehouse indebtedness and borrower dependent notes, to tangible net worth. As of December 31, 2019, Prosper was in compliance with the covenants under each Warehouse Agreement. PWIT Warehouse Line On January 19, 2018, through PWIT, Prosper entered into a Warehouse Agreement for a Warehouse Line. Effective June 12, 2018, the Warehouse Agreement was amended. The amendments included increasing the committed line of credit from $100 million to $200 million, extending the term of the PWIT Warehouse Line (including the final maturity date), amending the monthly unused commitment fee and reducing the rate at which the PWIT Warehouse Line bears interest. Subsequently the Warehouse Agreement was amended on June 20, 2019 to extend the facility, to reduce the interest rate and unused commitment fee and to expand the eligibility criteria for unsecured consumer loans that can be financed through the PWIT Warehouse Line. Under the amended agreement, proceeds of loans made under the PWIT Warehouse Line may be borrowed, repaid and reborrowed until the earlier of June 20, 2021 and at the occurrence of any accelerated amortization event or event of default. Repayment of any outstanding proceeds will be made over the 24 month period ending June 20, 2023, excluding the occurrence of any accelerated amortization event or event of default. Under the amended agreement, the PWIT Warehouse Line bears interest at a rate of LIBOR plus 2.9% and has an advance rate of 89%. Additionally, the PWIT Warehouse Line bears a monthly unused commitment fee, depending on utilization, of 0.50% per annum on the undrawn portion available under the PWIT Warehouse Line. As of December 31, 2019, Prosper had $81.4 million in debt and accrued interest outstanding under the PWIT Warehouse Line. This debt is secured by an aggregate outstanding principal balance of $85.7 million included in “Loans Held for Sale, at Fair Value” on the Consolidated Balance Sheets. At December 31, 2019 the undrawn portion available under the Warehouse Line was $119.0 million. Prosper incurred $1.8 million of deferred debt issuance costs, which are included in “Prepaids and Other Assets” and amortized to interest expense over the term of the revolving arrangement. Prosper purchased a swaption to limit the Company's exposure to increases in LIBOR. The swaptions are recorded on the consolidated balance sheet at fair value in Prepaids and Other Assets. Any changes in the fair value are recorded in the Change in Fair Value of Financial Instruments, Net on the Consolidated Statement of Operations. The fair value of the swaption was not material at December 31, 2019. PWIIT Warehouse Line On March 28, 2019, through PWIIT, Prosper entered into a second Warehouse Agreement for a $300 million Warehouse Line with a national banking association different than that of PWIT. Under the PWIIT Warehouse Agreement, proceeds of loans made under the PWIIT Warehouse Line may be borrowed, repaid, and reborrowed until the earlier of March 28, 2021 and at the occurrence of any accelerated amortization event or event of default. Repayment of any outstanding proceeds will be made over the 24 month period ending March 28, 2023, excluding the occurrence of any accelerated amortization event or event of default. Under the agreement, the PWIIT Warehouse Line bears interest at a rate of LIBOR, or the lender's asset-backed commercial paper rate, plus a spread of 2.9%. The spread increases by 0.375% during the first twelve months immediately following the termination of the revolving period with an additional increase of 0.375% one year later. The PWIIT Warehouse Line has an advance rate of 90%. Additionally, the PWIIT Warehouse Line bears a monthly unused commitment fee of 0.50% per annum on the undrawn portion available under the PWIIT Warehouse Line. As of December 31, 2019, Prosper had $50.2 million in debt and accrued interest outstanding under the PWIIT Warehouse Line. This debt is secured by an aggregate outstanding principal balance of $56.5 million included in Loans Held for Sale, at Fair Value on the Consolidated Balance Sheets. At December 31, 2019 the undrawn portion available under the PWIIT Warehouse Line was $250.0 million. Prosper incurred $2.1 million of deferred debt issuance costs, which are included in “Prepaids and Other Assets” and amortized to interest expense over the term of the revolving arrangement. |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share Prosper computes net income (loss) per share in accordance with ASC Topic 260, Earnings Per Share (“ASC Topic 260”). Under ASC Topic 260, basic Net Loss Per Share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding for the period and excludes the effects of any potentially dilutive securities. Proper computes its earnings (loss) per share (“EPS”) using the two-class method in ASC Topic 260. The two-class method allocates earnings that otherwise would have been available to common shareholders to holders of participating securities. Management considers all series of our Convertible Preferred Stock to be participating securities due to their rights to participate in dividends with Common Stock. As such, earnings allocated to these participating securities, which include participation rights in undistributed earnings, are subtracted from net income to determine total undistributed earnings to be allocated to common stockholders. All participating securities are excluded from basic weighted-average common shares outstanding. Prior to any conversion to common shares, each series of Prosper’s Convertible Preferred Stock was entitled to participate on an if-converted basis in distributions of earnings, when and if declared by the board of directors, that were made to common stockholders and consequently, these shares were considered participating securities. During the year ended December 31, 2019, 2018 and 2017, certain shares issued as a result of the early exercise of stock options which are subject to a repurchase right by PMI were entitled to receive non-forfeitable dividends during the vesting period and consequently, are considered participating securities. The weighted average shares used in calculating basic and diluted Net Loss Per Share excludes certain shares that are disclosed as outstanding shares in the Consolidated Balance Sheets because such shares are restricted as they were associated with options that were early exercised and continue to remain unvested. Basic and diluted Net Loss Per Share was calculated as follows (in thousands, except share and per share amounts): December 31, 2019 2018 2017 Numerator: Net Loss $ (13,711) $ (39,945) $ (115,158) Plus: Return from shareholders on share repurchase 1,066 — — Net income (loss) available to common stockholders $ (12,645) $ (39,945) $ (115,158) Denominator: Weighted average shares used in computing basic and diluted Net Loss Per Share 70,511,605 70,384,501 69,687,836 Net Loss Per Share - basic and diluted $(0.18) $(0.57) $(1.65) The following Common Stock equivalents were excluded from the computation of diluted Net Loss Per Share for the periods presented because including them would have been anti-dilutive (number of shares): December 31, 2019 2018 2017 Excluded Securities Convertible Preferred Stock issued and outstanding 209,613,570 214,637,925 214,637,925 Stock options issued and outstanding 73,851,862 69,023,373 46,722,408 Unvested stock options exercised — — 11,565 Warrants issued and outstanding 1,080,349 1,081,630 1,166,145 Series E-1 Convertible Preferred Stock warrants 35,544,141 35,544,141 35,544,141 Series F Convertible Preferred Stock warrants 177,720,704 177,720,704 177,720,704 497,810,626 498,007,773 475,802,888 |
Convertible Preferred Stock, Wa
Convertible Preferred Stock, Warrant Liability and Stockholders’ Deficit | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Convertible Preferred Stock, Warrant Liability and Stockholders’ Deficit | Convertible Preferred Stock, Convertible Preferred Stock Warrant Liability and Common Stock Convertible Preferred Stock Under PMI’s amended and restated certificate of incorporation, preferred stock is issuable in series and the Board of Directors is authorized to determine the rights, preferences, and terms of each series. In January 2013, PMI issued and sold 69,340,760 shares of Series A Convertible Preferred Stock in a private placement at a purchase price of $0.29 per share for $19.8 million, net of issuance costs. In connection with that sale, PMI issued 25,585,910 shares at par value $0.01 per share of Series A-1 Convertible Preferred Stock to the holders of shares of PMI’s Convertible Preferred Stock that was outstanding immediately prior to the sale (“Old Preferred Shares”) in consideration for such stockholders participating in the sale. In connection with the Series A sale, Old Preferred Shares were converted into shares of Common Stock at a ratio of 1:1 if the holder of the Old Preferred Shares participated in the Series A sale or at a 10:1 ratio if the holder of the Old Preferred Shares did not so participate. In addition, each such participating holder received a share of Series A-1 Convertible Preferred Stock for every dollar of liquidation preference associated with an Old Preferred Share held by such holder. Each share of Series A-1 preferred stock has a liquidation preference of $2.00 and converts into Common Stock at a ratio of 1,000,000:1. The Series A and Series A-1 Convertible Preferred Stock were sold in reliance on the exemption from the registration requirements of the Securities Act set forth in Section 4(2) of the Securities Act and Regulation D promulgated thereunder regarding sales by an issuer not involving a public offering. In September 2013, PMI issued and sold 41,443,670 shares of Series B Convertible Preferred Stock in a private placement at a purchase price of $0.60 per share for approximately $24.9 million, net of issuance costs. The Series B Convertible Preferred Stock was sold in reliance on the exemption from the registration requirements of the Securities Act set forth in Section 4(2) of the Securities Act and Regulation D promulgated thereunder regarding sales by an issuer not involving a public offering. In May 2014, PMI issued and sold 24,404,770 shares of Series C Convertible Preferred Stock in a private placement at a purchase price of $2.87 per share for approximately $69.9 million, net of issuance costs. The Series C Convertible Preferred Stock was sold in reliance on the exemption from the registration requirements of the Securities Act set forth in Section 4(2) of the Securities Act and Regulation D promulgated thereunder regarding sales by an issuer not involving a public offering. The purpose of the Series C private placement was to raise funds for general corporate needs and for the tender offer discussed below. On June 18, 2014, PMI issued a Tender Offer Statement to purchase up to 6,963,785 shares, in the aggregate, of its Series A Convertible Preferred Stock and Series B Convertible Preferred Stock at a price equal to $2.87 per share. Upon closure of the tender offer on July 16, 2014, 782,540 shares of Series A Convertible Preferred Stock and 5,667,790 shares of Series B Convertible Preferred Stock were purchased for an aggregate price of $18.5 million. In April 2015, PMI issued and sold 23,888,640 shares of Series D Convertible Preferred Stock in a private placement at a purchase price of $6.91 per share for proceeds of approximately $164.8 million, net of issuance costs. The Series D Convertible Preferred Stock was sold in reliance on the exemption from the registration requirements of the Securities Act set forth in Section 4(2) of the Securities Act and Regulation D promulgated thereunder regarding sales by an issuer not involving a public offering. The purpose of the Series D private placement was to raise funds for general corporate needs and for the share repurchase discussed below. In December 2016, PMI authorized 40,000,000 shares of Series E Convertible Preferred Stock. These shares are reserved for the Convertible Preferred Stock warrants that were also issued in December 2016 On December 16, 2016, PMI issued a warrant to purchase 20,267,135 shares of Series E-1 Convertible Preferred Stock of PMI at an exercise price of $0.01 per share (the “First Series E-1 Warrant”) to Pinecone Investments LLC (“Pinecone”), an affiliate of Colchis Capital Management, L.P. (“Colchis”). On February 27, 2017, PMI issued to Pinecone Investments LLC a second warrant (the “Second Series E-1 Warrant,” and together with the First Series E-1 Warrant, the “Series E-1 Warrants”) to purchase 15,277,006 shares of Series E-1 Convertible Preferred Stock at an exercise price of $0.01 per share. The Series E-1 Warrants are immediately exercisable, in whole or in part, by paying in cash the full purchase price payable in respect of the number of shares purchased. The Series E-1 Warrants were issued pursuant to the Warrant Agreement dated December 16, 2016 between PMI and Colchis, as previously described in PMI’s Current Report on Form 8-K as filed with the SEC on December 22, 2016. In connection with the Consortium Purchase Agreement (as define d in Note 17) entered into with affiliates of the Consortium (as defin ed in Note 17, such affiliates, “Warrant Holders”) a warrant agreement was signed (the “Series F Warrant Agreement”). Pursuant to the Series F Warrant Agreement, PMI issued to the Consortium three warrants (together, the “Series F Warrant”) to purchase up to an aggregate 177,720,706 shares of PMI’s Series F Convertible Preferred Stock at an exercise price of $0.01 per share (the “Series F Warrant Shares”). The Warrant Holders' right to exercise the Series F Warrant was subject to monthly vesting during the term of the Consortium Purchase Agreement based upon the volume of loans the Consortium elected to purchase (if any) in each month, subject to certain cure rights such as offering additional loans for sale in subsequent periods. Under the terms of the Series F Warrant Agreement, the Series F Warrant Shares may also vest in full upon a change of control of PMI, insolvency of PMI or PFL, certain breaches of contract by PMI or PFL that are not cured within a defined cure period and upon the occurrence of certain events set forth in the Warrant Agreement. The Series F Warrant will be exercisable with respect to vested Series F Warrant Shares, in whole or in part, at any time prior to the tenth anniversary of its date of issuance. The number of shares underlying the Series F Warrant may be adjusted following certain events such as stock splits, dividends, reclassifications and certain other issuances by PMI. On September 20, 2017, Prosper issued and sold 37,249,497 shares of Series G Convertible Preferred Stock in a private placement at a purchase price of $1.34 per share for proceeds of approximately $47.9 million, net of issuance costs. The Series G Convertible Preferred Stock was sold in reliance on the exemption from the registration requirements of the Securities Act set forth in Section 4(a)(2) of the Securities Act regarding sales by an issuer not involving a public offering. The purpose of the Series G private placement was to raise funds for general corporate purposes. On December 23, 2019, Prosper entered into a Stock Repurchase Agreement with an investor to repurchase 7,221,020 shares, in the aggregate, of Series A, Series A-1, and Series B Convertible Preferred Stock and Common Stock for nominal consideration. Upon execution of the Agreement, 2,130,035 shares of Series A Convertible Preferred Stock, 2,245,600 shares of Series A-1 Convertible Preferred Stock, 648,720 shares of Series B Convertible Preferred Stock and 2,196,665 shares of Common Stock were repurchased. The number of authorized, issued and outstanding shares, their par value and liquidation preference for each series of Convertible Preferred Stock as of December 31, 2019 are disclosed in the table below (amounts in thousands, except share and per share amounts): Par Value Authorized Shares Issued and Outstanding Shares Liquidation Preference (Outstanding Shares) Series A $ 0.01 68,558,220 66,428,185 $ 19,160 Series A-1 $ 0.01 24,760,915 22,515,315 45,031 Series B $ 0.01 35,775,880 35,127,160 21,190 Series C $ 0.01 24,404,770 24,404,770 70,075 Series D $ 0.01 23,888,640 23,888,640 165,000 Series E-1 $ 0.01 35,544,141 — — Series E-2 $ 0.01 16,858,078 — — Series F $ 0.01 177,720,707 3 — Series G $ 0.01 37,249,497 37,249,497 50,000 444,760,848 209,613,570 $ 370,456 Dividends Dividends on shares of the Series A, Series B, Series C, Series D, Series E-1, Series E-2, Series F, and Series G Convertible Preferred Stock are payable only when, as, and if declared by the Board of Directors. No dividends will be paid with respect to the Common Stock until any declared dividends on the Convertible Preferred Stock have been paid or set aside for payment to the preferred stockholders. After payment of any such dividends, any additional dividends or distributions will be distributed among all holders of Common Stock and preferred stock in proportion to the number of shares of Common Stock that would be held by each such holder if all shares of preferred stock were converted to Common Stock at the then effective conversion rate. The Series A-1 convertible preferred shares have no dividend rights. To date, no dividends have been declared on any of the PMI’s preferred stock or Common Stock. Conversion Under the terms of PMI’s amended and restated certificate of incorporation, the holders of preferred stock have the right to convert such preferred stock into Common Stock at any time. In addition, all preferred stock automatically converts into Common Stock (x) immediately prior to the closing of an Initial Public Offering (“IPO”) that values Prosper at least at $2 billion and that results in aggregate proceeds to Prosper of at least $100 million or (y) upon a written request from the holders of at least 60% of the voting power of the outstanding preferred stock (on an as-converted basis, provided that: (i) the Series A-1 Convertible Preferred Stock shall not be converted without at least 14% of the voting power of the outstanding Series A-1 Convertible Preferred Stock; (ii) the Series D shall not be converted without at least 60% of the voting power of the outstanding Series D; (iii) the Series E-1 and Series E-2 shall not be converted without at least 60% of the voting power of the outstanding Series E-1 and Series E-2, voting together as a single class; (iv) the Series F shall not be converted without at least 60% of the voting power of the outstanding Series F, and (v) the shares of Series G Preferred Stock will not be automatically converted unless the holders of at least 60% of the outstanding shares of Series G Preferred Stock approve such conversion). In addition, if a holder of the Series A Convertible Preferred Stock has converted any of the Series A Convertible Preferred Stock, then all of such holder’s shares of Series A-1 Convertible Preferred Stock also will be converted upon a liquidation event. In lieu of any fractional shares of Common Stock to which a holder would otherwise be entitled, PMI shall pay such holder cash in an amount equal to the fair market value of such fractional shares, as determined by its Board of Directors. At present, each of the Series A, Series B, Series C, Series D, Series E-1, Series E-2, and Series F Convertible Preferred Stock converts into PMI Common Stock at a 1:1 ratio. Meanwhile, the Series A-1 Convertible Preferred Stock converts into Common Stock at a 1,000,000:1 ratio and the Series G Convertible Preferred Stock converts into Common Stock at a 1:1.36 ratio. The Series G Convertible Preferred Stock conversion ratio reflects the Series G true-up that occurred at end of the vesting period for the Series E-2 and Series F Preferred Stock warrants. For the Series G true-up, the conversion price of the Series G Convertible Preferred Stock was reduced to a number equal to the Series G Preferred Stock original issuance price, divided by the quotient obtained by dividing the Series G true-up amount by the total number of Series G Preferred Stock issued as of the Series G closing date. The Series G true-up amount means the aggregate number of shares of Series G Preferred Stock that would have been issued to the purchasers of the Series G Preferred Stock on the Series G closing date, if warrants to purchase shares of Series E-2 Preferred Stock or Series F Preferred Stock that were exercisable or exercised as of the true-up time (end of vesting period) had been exercisable or exercised as of such Series G closing date. Liquidation Rights PMI’s Convertible Preferred Stock has been classified as temporary equity on the consolidated balance sheet. The preferred stock is not redeemable at the option of holders of the Convertible Preferred Stock; however, in the event of a voluntary or involuntary liquidation, dissolution, change in control or winding up of PMI, holders may have the right to receive its liquidation preference under the terms of PMI’s certificate of incorporation. Each holder of Series E-1, Series E-2 and Series F Convertible Preferred Stock is entitled to receive prior and in preference to any distribution of proceeds from a liquidation event to the holders of Series A, Series B, Series C, Series D, Series G and Series A-1 Convertible Preferred Stock or Common Stock, an amount per share for (i) each share of Series E-1 Convertible Preferred Stock equal to the sum of the liquidation preference specified for such share and all declared but unpaid dividends, if any, on such share, (ii) each share of Series E-2 Convertible Preferred Stock equal to the sum of two-thirds the liquidation preference specified for such share and all declared but unpaid dividends, if any, on such share, and (iii) each share of Series F Convertible Preferred Stock equal to the sum of two-thirds of the liquidation preference specified for such share and all declared but unpaid dividends, if any, on such share. After the payment or setting aside for payment to the holders of Series E-1, Series E-2, and Series F Convertible Preferred Stock each holder of Series A, Series B, Series C and Series D, Series E-2, Series F and Series G Convertible Preferred Stock is entitled to receive, on a pari passu basis, prior to and in preference to any distribution of proceeds from a liquidation event to the holders of Series A-1 Convertible Preferred Stock or Common Stock, (i) an amount per share for each share of Series E-2 and Series F Convertible Preferred Stock equal to the sum of one-third of the liquidation preference specified for such share and all declared but unpaid dividends, if any, on such share, and (ii) an amount per share for each share of Series A, Series B, Series C, Series D and Series G Convertible Preferred Stock equal to the sum of the liquidation preference specified for such share and all declared but unpaid dividends, if any, on such share. After the payment or setting aside for payment to the holders of Series A, Series B, Series C, Series D, Series E-1, Series E-2, Series F and Series G Convertible Preferred Stock, the holders of Series A-1 Convertible Preferred Stock are entitled to receive, prior and in preference to any distribution of proceeds to the holders of Common Stock, an amount per share for each such share of Series A-1 Convertible Preferred Stock equal to the sum of the liquidation preference specified for such share and all declared but unpaid dividends, if any, on such share. After the payment or setting aside for payment to the holders of Series A, Series B, Series C, Series D, Series E-1, Series E-2, Series F, Series G and Series A-1 Convertible Preferred Stock, the entire remaining proceeds legally available for distribution will be distributed pro-rata to the holders of Series A Convertible Preferred Stock and Common Stock in proportion to the number of shares of Common Stock held by them assuming the Series A Convertible Preferred Stock has been converted into shares of Common Stock at the then effective conversion rate, provided that the maximum aggregate amount per share of Series A Convertible Preferred Stock which the holders of Series A Convertible Preferred Stock shall be entitled to receive is three times the original issue price for the Series A Convertible Preferred Stock. At present, the liquidation preferences are equal to $0.29 per share for the Series A Convertible Preferred Stock, $2.00 per share for the Series A-1 Convertible Preferred Stock, $0.60 per share for the Series B Convertible Preferred Stock, $2.87 per share for the Series C Convertible Preferred Stock, $6.91 per share for the Series D Convertible Preferred Stock, $0.84 per share for the Series E-1 Convertible Preferred Stock, $0.84 per share for the Series E-2 Convertible Preferred Stock, $0.84 per share for the Series F Convertible Preferred Stock and $1.34 per share for the Series G Convertible Preferred Stock. Voting Each holder of shares of Convertible Preferred Stock is entitled to the number of votes equal to the number of shares of Common Stock into which such shares of Convertible Preferred Stock could be converted and each has voting rights and powers equal to the voting rights and powers of the Common Stock. The holders of Convertible Preferred Stock and the holders of Common Stock vote together as a single class (except with respect to certain matters that require separate votes or as required by law), and are entitled to notice of any stockholders’ meeting in accordance with the bylaws of PMI. Convertible Preferred Stock Warrant Liability Series E-1 Warrants In connection with the Settlement and Release Agreement dated November 17, 2016 among PMI, PFL and Colchis, on December 16, 2016, PMI issued the First Series E-1 Warrant. A Second Series E-1 Warrant for an additional 15,277,006 shares of Series E-1 Convertible Preferred Stock was granted on the signing of the Consortium Purchase Agreement (as defined in Note 17) on February 27, 2017. The warrants expire ten years from the date of issuance. Prosper re cognized $1.1 million and $9.2 million of income from the change in the fair value of the warrants for the years ended December 31, 2019 and 2018, respectively. The income or expense resulted from changes in the fair value of the warrant is recorded through Change in Fair Value of Convertible Preferred Stock Warrants in the Consolidated Statements of Operations. To determine the fair value of the Series E-1 Warrants, the Company first determined the value of a share of a Series E-1 Convertible Preferred Stock. To determine the fair value of the Convertible Preferred Stock, the Company first derived the business enterprise value (“BEV”) of the Company using a variety of valuation methods, including recent transactions in the Company's stock, discounted cash flow models and market based methods, as deemed appropriate under the circumstances applicable at the valuation date. Once the Company determined an estimated BEV, the option pricing method ("OPM") was used to allocate the BEV to the various classes of our equity, including our preferred stock. The concluded per share value for the Series E-1 Convertible Preferred Stock was utilized as an input to the Black-Scholes option pricing model. The Company determined the fair value of the outstanding convertible Series E-1 preferred stock warrants utilizing the following assumptions as of December 31, 2019 and 2018: December 31, 2019 2018 Volatility 46.0% 40.0% Risk-free interest rate 1.60% 2.62% Expected term (in years) 2.75 3.00 Dividend yield 0% 0% Volatility: The volatility is derived from historical volatilities of several unrelated publicly listed peer companies over a period approximately equal to the term of the warrant as the Company has limited information on the volatility of its preferred stock since there is currently no trading history. When making the selections of industry peer companies to be used in the volatility calculation, the Company considered the size, operational, and economic similarities to the Company’s principal business operations. Risk-Free Interest Rate: The risk-free interest rate is based on the U.S. Treasury yield in effect as of December 31, 2019, and for zero coupon U.S. Treasury notes with maturities approximately equal to the term of the warrant. Expected Term: The expected term is the period of time for which the warrants are expected to be outstanding. Dividend Yield: The expected dividend assumption is based on the Company’s current expectations about the Company’s anticipated dividend policy. Series F Warrants In connection with the Consortium Purchase Agreement (as described in Note 17) , PMI issued warrants to purchase 177,720,706 of PMI's Series F Convertible Preferred Stock at $0.01 per share. Prosper recognized $10.1 million and $35.8 million of income from the re-measurement of the fair value of the warrants for the years ended December 31, 2019 and 2018, respectively. The income or expense resulting from changes in the fair value of the warrant is recorded through Change in Fair Value of Convertible Preferred Stock Warrants in the Consolidated Statements of Operations. To determine the fair value of the Series F Warrants, we first determined the value of a share of a Series F Convertible Preferred Stock. To determine the fair value of the Convertible Preferred Stock, the Company first derived the BEV using valuation methods, including a combination of methods, as deemed appropriate under the circumstances applicable at the valuation date. Once the Company determined an estimated BEV, the OPM was used to allocate the BEV to the various classes of Prosper's equity, including our preferred stock. The concluded per share value for the Series F Convertible Preferred Stock warrants utilized the Black-Scholes option pricing model. The Company determined the fair value of the outstanding Series F Warrants utilizing the following assumptions as of December 31, 2019 and 2018: December 31, 2019 2018 Volatility 46.0% 40.0% Risk-free interest rate 1.60% 2.63% Expected term (in years) 2.75 3.00 Dividend yield 0% 0% The above assumptions were determined using the same criteria described above for the Series E-1 Warrants. The combined activity of the Convertible Preferred Stock Warrant Liability for the years ended December 31, 2019 and December 31, 2018 is as follows (in thousands): Balance at January 1, 2018 116,366 Warrants vested 72,316 Gain recognized (45,003) Balance at January 1, 2019 $ 143,679 Warrants Vested 17,552 Gain recognized (11,235) Balance at December 31, 2019 $ 149,996 Common Stock PMI, through its Amended and Restated Certificate of Incorporation, is the sole issuer of Common Stock and related options, RSUs and warrants. On February 16, 2016, PMI amended and restated its Certificate of Incorporation to, among other things, effect a 5-for-1 forward stock split. On September 20, 2017, PMI further amended its Amended and Restated Certificate of Incorporation to increase the number of shares of Common Stock authorized for issuance. The total number of shares of stock which PMI has the authority to issue is 1,069,760,848, consisting of 625,000,000 shares of Common Stock, $0.01 par value per share, and 444,760,848 shares of preferred stock, $0.01 par value per share. As described above, the Company repurchased 2,196,665 shares of Common Stock on December 23, 2019. As of December 31, 2019, 69,387,836 shares of Common Stock were issued and 68,451,901 shares of Common Stock were outstanding. As of December 31, 2018, 71,411,145 shares of Common Stock were issued and 70,475,210 shares of Common Stock were outstanding. Each holder of common stock is entitled to one vote for each share of common stock held. Common Stock Issued upon Exercise of Stock Options During the year ended December 31, 2019 and 2018, PMI issued 173,356 and 176,011 shares of Common Stock , respectively, upon the exercise of vested options for cash proceeds of $26 thousand and $30 thousand, respectively. Common Stock Issued upon Exercise of Warrants For the year ended December 31, 2018, PMI issued 8,200 shares of Common Stock upon the exercise of warrants, for $0.02 per share. No such warrants were exercised during the year ended December 31, 2019. |
Shared Based Compensation
Shared Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Shared Based Compensation | Share Based Compensation PMI grants equity awards primarily through its Amended and Restated 2005 Stock Option Plan (the “2005 Plan”), which was approved as amended and restated by its stockholders on December 1, 2010; and its 2015 Equity Incentive Plan, which was approved by its stockholders on April 7, 2015 and subsequently amended by an Amendment No. 1 and Amendment No. 2, which were approved by PMI's stockholders on February 15, 2016 and May 31, 2016, respectively (as amended, the “2015 Plan” and together with the 2005 Plan, “Stock Plans”). In March 2015, the 2005 Plan expired, except that any awards granted under the 2005 Plan prior to its expiration remain in effect pursuant to their terms. As of December 31, 2019, under the 2015 Plan, options to purchase up to 95,037,086 shares of PMI's Common Stock are reserved and may be granted to employees, directors, and consultants by PMI’s Board of Directors and stockholders to promote the success of Prosper’s business. Options generally vest 25% one year from the vesting commencement date and 1/48t h per month thereafter or vest 50% two years from the vesting commencement date and 1/48 per month thereafter or vest 1/36th per month from the vesting commencement date. In no event are options exercisable more than ten years after the date of grant. Stock Options Stock Option Reprice On May 3, 2016, the Compensation Committee of the Board of Directors of PMI approved a stock option repricing program authorizing PMI’s officers to reprice certain outstanding stock options held by employees and directors that had exercise prices above the current fair market value of PMI’s Common Stock. On March 17, 2017, the Compensation Committee of the Board of Directors of PMI approved a stock option repricing program (together with the 2016 repricing program, the “Repricings”), authorizing PMI’s officers to reprice certain outstanding stock options held by employees and directors that had exercise prices above the current fair market value of PMI’s Common Stock. Prosper believes that Repricings encourage the continued service of valued employees and directors and motivate them to perform at high levels, both of which are critical to Prosper’s continued success. Prosper has incurred and expects to incur additional share based compensation charges as a result of the Repricings. The financial statement impact of the above Repricings was $0.3 million, $0.8 million and $1.9 million in the years ended December 31, 2019, 2018 and 2017, respectively. As of December 31, 2019, the unamortized Repricings amount (net of forfeitures) was immaterial and will be recognized over the remaining weighted average vesting period of 0.3 years. Stock Option Activity Stock option activity under the Stock Plans is summarized for the year ended December 31, 2019 as follows: Options Issued and Outstanding Weighted- Average Exercise Price Weighted-Average Contractual Term (in years) Aggregate intrinsic value (1) (in thousands) Balance as of January 1, 2019 71,021,698 $ 0.33 8.20 Options granted 14,792,348 $ 0.24 Options exercised (173,356) $ 0.15 Options forfeited (9,350,233) $ 0.38 Option expirations (53,700) $ 0.30 Balance as of December 31, 2019 76,236,757 $ 0.31 7.41 $ 169 Options vested and expected to vest as of December 31, 2019 62,647,818 $ 0.31 7.41 $ 139 Options vested and exercisable at December 31, 2019 50,693,384 $ 0.28 6.68 $ 169 (1) Aggregate intrinsic value represents the excess of the fair value of our Common Stock as of December 31, 2019 over the exercise price of the outstanding in-the-money options. Additional information pertaining to PMI's Common Stock option activities is as follows (in thousands, except per share data): Year ended December 31, 2019 2018 2017 Weighted-average grant date fair value of options granted (per share) $ 0.11 $ 0.52 $ 0.28 Valuation The fair value of options granted to employees is estimated on the grant date using the Black-Scholes option valuation model. This valuation model for share based compensation expense requires Prosper to make assumptions and judgments about the variables used in the calculation, including the fair value of PMI’s Common Stock, the expected term (the period of time that the options granted are expected to be outstanding), the volatility of PMI’s Common Stock, a risk-free interest rate, and expected dividends. Given the absence of a publicly traded market, Prosper considered numerous objective and subjective factors to determine the fair value of PMI’s Common Stock at each grant date. These factors included, but were not limited to: (i) contemporaneous valuations of Common Stock performed by unrelated third-party specialists, (ii) the prices for PMI’s preferred stock sold to outside investors, (iii) the rights, preferences and privileges of PMI’s preferred stock relative to PMI’s Common Stock; (iv) the lack of marketability of PMI’s Common Stock, (v) developments in the business, (vi) secondary transactions of PMI’s common and preferred shares, and (vii) the likelihood of achieving a liquidity event, such as an initial public offering or a merger or acquisition of Prosper, given prevailing market conditions. As PMI’s stock is not publicly traded volatility for stock options is based on an average of the historical volatilities of the Common Stock of several entities with characteristics similar to those of Prosper. The expected term assumptions were determined based on the vesting terms, exercise terms and contractual lives of the options using the simplified method. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option. Prosper uses an expected dividend yield of zero as it does not anticipate paying any dividends in the foreseeable future. Prosper also estimates forfeitures of unvested stock options. Expected forfeitures are based on Prosper’s historical experience. To the extent actual forfeitures differ from estimates, the difference will be recorded as a cumulative adjustment in the period estimates are revised. No compensation cost is recorded for options that do not vest. The fair value of PMI’s stock option awards granted during the years ended December 31, 2019, 2018 and 2017 was estimated at the date of grant using the Black-Scholes model with the following weighted average assumptions: December 31, 2019 2018 2017 Volatility of Common Stock 46.70 % 44.04 % 49.24 % Risk-free interest rate 1.95 % 2.78 % 2.12 % Expected life 6.0 years 6.0 years 6.0 years Dividend yield 0 % 0 % 0 % PMI did not grant any performance-based options in 2019, 2018, or 2017. Restricted Stock Units During the years ended December 31, 2018 and 2017, PMI granted restricted stock units (“RSUs”) to certain employees that are subject to three terms or four 2018 and 2017 was $1.9 million and $3 thousand, respectively. PMI did not grant any RSUs to employees during 2019 . The following table summarizes the activities for PMI’s RSUs during 2019: Number of Shares Weighted-Average Grant Date Fair Value Unvested at January 1, 2019 4,856,141 $ 0.96 Granted — $ — Vested — $ — Forfeited (53,000) $ 1.90 Unvested at December 31, 2019 4,803,141 $ 0.95 Share Based Compensation The following table presents the amount of share based compensation related to awards granted to employees recognized in Prosper’s Consolidated Statements of Operations (in thousands): Years Ended December 31, 2019 2018 2017 Origination and Servicing $ 417 $ 911 $ 996 Sales and Marketing 243 451 553 General and Administrative 3,868 7,039 10,689 $ 4,528 $ 8,401 $ 12,238 During the year ended December 31, 2019, 2018 and 2017, Prosper capi talized $310 thousand, $392 thousand and $294 thousand, respectively, of share based compensation as internal use software and website de velopment costs. As of December 31, 2019, the unamortized share based compensation expense adjusted for forfeiture estimates related to Prosper's employees’ unvested share based awards was approxima tely $3.4 million, which will be recognized over the remaining weighted-average vesting period of approximatel y 2.2 years. |
Restructuring
Restructuring | 12 Months Ended |
Dec. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring During 2016, Prosper adopted a strategic restructuring of its business. The restructuring was intended to streamline our operations and support future growth efforts. Under this restructuring, Prosper closed its Salt Lake City, Utah and Tel Aviv, Israel locations. In the year ended December 31, 2019, Prosper's restructuring costs relate to accretion and changes in sublease loss estimates for properties no longer in use . Other than accretion and changes in sublease loss estimates, Prosper does not expect any additional restructuring charges related to this restructuring. The following table summarizes the activities related to Prosper's restructuring plan (in thousands): Facilities Related Balance as of January 1, 2018 $ 3,244 Adjustments to expense 1,486 Sublease cash receipts 370 Less: Cash paid (3,126) Balance as of December 31, 2018 $ 1,974 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Entity Information [Line Items] | |
Income Taxes | Income Taxes On December 22, 2017, the Tax Cuts & Jobs Act (the “Act”) was enacted resulting in significant changes to tax law, including a reduction to the corporate tax rate from 35% to 21% effective for tax years beginning after December 31, 2017, immediate expensing of certain depreciable assets acquired and placed in service after September 27, 2017 and uncertainties around the tax accounting for debt instrument income under IRC Section 451. The Act did not give rise to any material impact on Prosper's consolidated financial statements. The components of income tax are as follows (in thousands): Years Ended December 31, 2019 2018 2017 Current: Federal $ — $ — $ — State — — — Foreign — 24 — Total Current Income Tax (Benefit) Expense — 24 — Deferred: Federal 47 47 (579) State 52 33 37 Foreign 1 68 34 Total Deferred Income Tax Expense (Benefit) 100 148 (508) Total Income Tax Expense (Benefit) $ 100 $ 172 $ (508) The Income Tax Expense (benefit) differed from the amount computed by applying the U.S. federal income tax rate of 21% to pretax loss as a result of the following: Years Ended December 31, 2019 2018 2017 Federal tax at statutory rate 21 % 21 % 34 % State tax at statutory rate (net of federal benefit) 9 % 8 % 7 % Change in U.S. Tax Rate Applied to Deferred Taxes — % — % (31) % Incentive Stock Options (4) % (3) % (1) % Preferred Stock Warrants 8 % 5 % (21) % Change in valuation allowance (33) % (32) % 11 % Other (1) % 1 % 1 % — % — % — % Temporary items that give rise to significant portions of deferred tax assets and liabilities are as follows (in thousands): December 31, 2019 2018 Net operating loss carry forwards $ 87,834 $ 82,510 Research & other credits 602 668 Fixed assets 42 463 Stock compensation 10,261 9,237 Accrued liabilities 1,858 3,256 Restructuring liability — 615 Other — 4 Lease Obligation 5,182 — Deferred tax assets 105,779 96,753 Fair value of loans — (248) Net servicing rights (2,843) (3,375) Intangible assets (1,067) (721) Foreign Earnings (69) (68) Right of Use Asset (3,816) — Deferred tax liabilities (7,795) (4,412) Net deferred tax asset 97,984 92,341 Valuation allowance (98,458) (92,714) Net deferred tax liability $ (474) $ (373) Prosper has determined that its net deferred tax asset did not satisfy the recognition criteria set forth in ASC Topic 740 and, accordingly, established a full valuation allowance against the net deferred tax asset. The valuation allowance as of December 31, 2019, increased by $5.8 million to $98.5 million from $92.7 million in the prior fiscal year. Under ASC 740, Accounting for Income Taxes (“ASC Topic 740”), a valuation allowance must be established when it is more likely than not that all or a portion of a deferred tax asset will not be realized. The amount of valuation allowance would be based upon management’s best estimate of Prosper’s ability to realize the net deferred tax assets. A valuation allowance can subsequently be reduced when management believes that the assets are realizable on a more-likely-than-not basis. The Internal Revenue Code imposes substantial restrictions on the utilization of net operating losses and tax credits in the event of an “ownership change” of a corporation. Accordingly, Prosper’s ability to utilize net operating losses and credit carryforwards may be limited in the future as the result of such an “ownership change.” Prosper files federal and various state income tax returns. Prosper has net operating loss carryforwards for both federal and state income tax purposes of approximately $326.6 million and $360.5 million, respectively, as of December 31, 2019, available to reduce future income subject to income taxes. The federal net operating loss carryforwards will begin to expire in 2026. The state net operating loss carryforwards began expiring in 2019. All net operating loss carryforwards are subject to a full valuation allowance. Prosper has federal and California research and development tax credits of approximately $428.5 thousand and $449.5 thousand, respectively. The federal research credits will begin to expire in 2034 and the California research credits have no expiration date. Prosper also has California enterprise zone credits of $1.1 million that will begin to expire in 2024. The following table summarizes Prosper’s activity related to its unrecognized tax benefits (in thousands): Balance as of January 1, 2018 $ 112 Decrease related to 2018 tax year position — Balance as of December 31, 2018 $ 112 Decrease related to 2019 tax year position tax year position — Balance as of December 31, 2019 $ 112 None of the unrecognized tax benefits would affect Prosper’s effective tax rate if these amounts are recognized due to the full valuation allowance. Prosper’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of Income Tax Expense. As of December 31, 2019, Prosper has not incurred any interest or penalties. All tax returns will remain open for examination by federal and most state taxing authorities for three |
Prosper Funding LLC | |
Entity Information [Line Items] | |
Income Taxes | Income Taxes Prosper Funding incurred no income tax provision for the year ended December 31, 2019 and 2018. Prosper Funding is a U.S. disregarded entity and its income and loss are included in the income tax reporting of its parent, Prosper Marketplace, Inc. Since Prosper Marketplace, Inc. is in a loss position, is not currently subject to income taxes, and has fully reserved against its deferred tax asset, the net effective tax rate for Prosper Funding is 0%. |
Consortium Purchase Agreement
Consortium Purchase Agreement | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Consortium Purchase Agreement | Consortium Purchase Agreement On February 27, 2017, Prosper entered into a series of agreements (the “Consortium Purchase Agreement”) with a consortium of investors (the “Consortium”), pursuant to which the Consortium agreed to purchase Borrower Loans in an aggregate principal amount of up to $5.0 billion (including certain loans purchased by one of the investors prior to the date of the Consortium Purchase Agreement). PFL was obligated to offer for purchase minimum monthly volumes of eligible loans to the Consortium, for the Consortium to elect to purchase. The Consortium Purchase Agreement ended in May 2019. In connection with the Consortium Purchase Agreement, PMI issued to the Consortium three warrant certificates to purchase an aggregate 177,720,706 shares of PMI’s Series F Preferred Stock at an exercise price of $0.01 per share (the “Warrant Shares”). The Consortium’s right to exercise the Series F Warrant was subject to monthly vesting during the term of the Consortium Purchase Agreement based upon the volume of loans the Consortium elected to purchase (if any) in each month, subject to certain cure rights such as offering additional loans for sale in subsequent periods. Pursuant to these cure rights, if the Consortium failed to respond to offers for allocation, purchase or funding, the Consortium could take advantage of a designated period of time to cure such failure. There were no such failures by the Consortium during the term of the Consortium Purchase Agreement. Under the terms of the Series F Warrant Agreement, the Warrant Shares may also vest in full upon a change of control of PMI, insolvency of PMI or PFL, certain breaches of contract by PMI or PFL that are not cured within a defined cure period and upon the occurrence of certain other events set forth in the Series F Warrant Agreement. On vesting of the Series F Warrants, Prosper recorded a liability as Convertible Preferred Stock Warrant Liability on the Consolidated Balance Sheets at fair value and a corresponding amount as Fair Value of Warrants Vested on Sale of Borrower Loans on the Consolidated Statements of Operations. Subsequent changes in the fair value of the vested warrants are recorded in Change in Fair Value of Convertible Preferred Stock Warrants on the Consolidated Statements of Operations. Additionally, in connection with the execution of the Consortium Purchase Agreement, certain previously issued rebates were settled by an issuance of vested Series F Convertible Preferred Stock Warrants. The difference in fair value of these warrants over the cash settlement price was recorded in Change in Fair Value of Convertible Preferred Stock Warrants on the Consolidated Statements of Operations. The following represents the loans purchased and warrants vested under the Consortium Purchase Agreement (dollars in thousands): Loans Acquired Warrants Vested Balance January 1, 2018 $ 1,826,527 75,186,002 Loans purchased by the consortium during the year ended December 31, 2018 1,240,805 79,726,978 Balance as of December 31, 2018 3,067,332 154,912,980 Loans purchased by the consortium during the year ended December 31, 2019 235,951 22,807,726 Balance December 31, 2019 $ 3,303,283 177,720,706 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | Leases Prosper has operating leases for corporate offices and datacenters. Our leases have remaining lease terms of 3 months to 7 years . Some of the lease agreements include options to extend the lease term for up to an additional 5 years. Rental expense under operating lease arrangements was $4.5 million, $4.2 million and $4.7 million for the year ended December 31, 2019, 2018 and 2017, respectively. Additionally, Prosper subleases certain leased office space to third parties when it determines there is excess leased capacity. Sublease revenue from operating lease arrangements was $0.8 million, $0.8 million and $0.3 million for the year ended December 31, 2019, 2018 and 2017, respectively. Operating Lease Right-of-Use (“ROU”) Assets The following represents the operating lease right-of-use (“ROU”) assets as of December 31, 2019 , which are included in "Property and Equipment, Net" on the Consolidated Balance Sheets . December 31, 2019 Gross Carrying Value Accumulated Amortization Net Carrying Value ROU assets - office buildings $ 15,921 $ 3,262 $ 12,659 ROU assets - other 292 232 60 $ 16,213 $ 3,494 $ 12,719 Lease Liabilities Prosper has entered into various non-cancelable operating leases for certain offices with contractual lease periods expiring between 2020 and 2026. The table below presents the present value of Prosper's future minimum rental payments for the remaining terms of the operating leases (in thousands): December 31, 2019 2020 $ 5,236 2021 5,130 2022 5,014 2023 1,562 2024 871 Thereafter 1,820 Total future minimum lease payments 19,633 Less: Imputed interest (2,126) Present value of future minimum lease payments $ 17,507 The table below presents future minimum rental payments at December 31, 2018, net of minimum sublease rentals of $5.3 million, for the remaining terms of the operating leases (in thousands): December 31, 2018 2019 $ 4,536 2020 4,683 2021 4,456 2022 4,319 2023 847 Thereafter 387 Total future operating lease obligations $ 19,228 Because the rate implicit in each lease is not readily determinable, we use our incremental borrowing rate to determine the present value of the lease payments. Values used to determine present value of leases is as follows (dollars in thousands): December 31, 2019 Cash paid for operating leases year-to-date $ 5,228 Right of use assets obtained in exchange for new operating lease obligations (1) $ 21,706 Weighted average remaining lease term 4.16 years Weighted average discount rate 5.54 % (1) Consists of $21.7 million for operating leases existing on January 1, 2019. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Entity Information [Line Items] | |
Commitments and Contingencies | 19. Commitments and Contingencies In the normal course of its operations, Prosper becomes involved in various legal actions. Prosper maintains provisions it considers to be adequate for such actions. Prosper does not believe it is probable that the ultimate liability, if any, arising out of any such matters will have a material effect on Prosper's financial condition, results of operations or cash flows. Operating Commitments Prosper has entered into an agreement with WebBank, under which all Borrower Loans originated through the marketplace are made under WebBank's bank charter. On February 1, 2019, Prosper and WebBank extended the terms of their Agreement. Pursuant to the agreement, the marketing fee that Prosper receives in connection with the origination of each loan is partially reduced by an amount (the “Designated Amount”) calculated as a percentage of the principal amount of such loan based on the aggregate principal amount of loans originated for the applicable month. To the extent the aggregate Designated Amount for all loans originated during any month is less than $143.5 thousand, Prosper is required to pay WebBank an amount equal to such deficiency. Accordingly, the minimum fee is $1.7 million, $1.7 million and $0.1 million for the years 2020, 2021 and 2022, respectively. Additionally, under the agreement with WebBank, Prosper is required to maintain minimum net liquidity of $15 million at all times during the term of the agreement. Net liquidity is defined as the sum of Cash and Cash Equivalents and Available for Sale Investments. Violation of this covenant can result in termination of the contract with WebBank. At December 31, 2019, Prosper was in compliance with the covenant. Loan Purchase Commitments Under the terms of Prosper's agreement with WebBank, Prosper is committed to purchase $18.6 million of Borrower Loans that WebBank originated during the last two business days of the year ended December 31, 2019. Repurchase Obligation Under the terms of the loan purchase agreements between Prosper and investors that participate in the Whole Loan Channel, Prosper may, in certain circumstances, become obligated to repurchase a Borrower Loan from an investor. Generally, these circumstances include the occurrence of verifiable identity theft, the failure to properly follow loan listing or bidding protocols or a violation of the applicable federal, state or local lending laws. Prosper recognizes a liability at fair value for the repurchase obligation when the Borrower Loans are sold. The fair value of the repurchase obligation is estimated based on historical experience. Repurchased Borrower Loans associated with violations of federal, state or local lending laws or verifiable identity theft are written off at the time of repurchase. The maximum potential amount of future payments associated under the repurchase obligation is the outstanding balances of the Borrower Loans sold through the Whole Loan channels, which at December 31, 2019 is $3.1 billion. Prosper has accrued $0.4 million and $0.9 million as of December 31, 2019 and 2018, respectively, related to this obligation. Regulatory Contingencies Prosper accrues for contingencies when a loss from such contingencies is probable and the amount of loss can be reasonably estimated. In determining whether a loss is probable and if it is possible to quantify the amount of the estimated loss, Prosper reviews and evaluates its litigation and regulatory matters on at least a quarterly basis in light of potentially relevant factual and legal developments. If Prosper determines that an unfavorable outcome is not probable or that the amount of a loss cannot be reasonably estimated, Prosper does not accrue for a potential litigation loss. If an unfavorable outcome is probable and Prosper can estimate a range of outcomes, an amount is recorded which management considers to be the best estimate within the range of potential losses that are both probable and estimable; however, if management cannot quantify the amount of the estimated loss, then the low end of the range of the potential losses is recorded. Securities Law Compliance In 2017, Prosper paid the fourth and final annual installment of $3.0 million in a settlement of a class action lawsuit that was agreed to in 2013. SEC Inquiry In April 2017, we became aware of an error in the annualized net return and seasoned annualized net return numbers displayed to Note investors. Prosper was advised by the SEC that it was investigating whether violations of federal securities laws had occurred in connection with the error. On April 19, 2019, the SEC accepted an offer of settlement from PFL to resolve the matter. Under the settlement, the SEC alleged a violation of Section 17(a)(2) of the Securities Act and ordered PFL to cease and desist from any future violations of that provision. PFL neither admitted nor denied any wrongdoing, and agreed to pay a civil monetary penalty of $3.0 million. The penalty of $3.0 million was paid in full in April 2019. West Virginia Matter In January 2018, the Attorney General of the State of West Virginia (the “Attorney General”) initiated discussions regarding certain acts and practices of PMI and PFL that the Attorney General asserts may have violated the West Virginia Consumer Credit and Protection Act (the “Consumer Act”), to which Prosper responded with such information as was requested by the Attorney General. Following a period of more than a year with limited to no communication, in February 2020, Prosper received a proposed Assurance of Discontinuance (an “AOD”) from the Attorney General requesting that, without in any way admitting that any of its prior practices were in violation of the Consumer Act, Prosper agree to certain terms and conditions regarding its past and potential future conduct of its business with respect to customers in West Virginia, including a release by the Attorney General of any claims it may have related to the matters identified in the AOD. Prosper is evaluating and intends to discuss the proposed terms in the AOD with the Attorney General. We cannot predict the outcome of the matter and any potential fines or penalties, if any, that may arise from the matter. Further, we are unable to estimate a range of outcomes and as a result no accrual has been made. No loans have been originated through the Prosper platform to West Virginians since June 2016. |
Prosper Funding LLC | |
Entity Information [Line Items] | |
Commitments and Contingencies | Commitments and ContingenciesIn the normal course of its operations, Prosper Funding becomes involved in various legal actions. Prosper Funding maintains provisions it considers to be adequate for such actions. The Company does not believe it is probable that the ultimate liability, if any, arising out of any such matters will have a material effect on financial condition, results of operations or cash flows. Operating Commitments Prosper Funding has entered into an agreement with WebBank, under which all Borrower Loans originated through the marketplace are made under WebBank's bank charter. On February 1, 2019, Prosper Funding and WebBank extended the terms of their agreement. Pursuant to the agreement, the marketing fee that Prosper Funding receives in connection with the origination of each loan is partially reduced by an amount (the “Designated Amount”) calculated as a percentage of the principal amount of such loan based on the aggregate principal amount of loans originated for the applicable month. To the extent the aggregate Designated Amount for all loans originated during any month is less than $143.5 thousand, Prosper Funding is required to pay WebBank an amount equal to such deficiency. Accordingly, the minimum fee is $1.7 million, $1.7 million and $0.1 million for the years 2020, 2021 and 2022, respectively. Additionally, under the agreement with WebBank, Prosper Funding is required to maintain minimum net liquidity of $15 million at all times during the term of the agreement. Net liquidity is defined as the sum of Cash, Cash Equivalents and Available for Sale Investments. Violation of this covenant can result in termination of the contract with WebBank. At December 31, 2019 the Company was in compliance with the covenant. Loan Purchase Commitments Under the terms of Prosper Funding's agreement with WebBank, Prosper Funding is committed to purchase $18.6 million of Borrower Loans that WebBank originated during the last two business days of the year ended December 31, 2019. Repurchase Obligation Under the terms of the loan purchase agreements between Prosper and investors that participate in the Whole Loan Channel, Prosper Funding may, in certain circumstances, become obligated to repurchase a Borrower Loan from an investor. Generally, these circumstances include the occurrence of verifiable identity theft, the failure to properly follow loan listing or bidding protocols or a violation of the applicable federal, state or local lending laws. Prosper Funding recognizes a liability at fair value for the repurchase obligation when the Borrower Loans are sold. The fair value of the repurchase obligation is estimated based on historical experience. Repurchased Borrower Loans associated with violations of federal, state or local lending laws or verifiable identity theft are written off at the time of repurchase. The maximum potential amount of future payments associated under the repurchase obligation is the outstanding balances of the Borrower Loans sold through the Whole Loan channels, which at December 31, 2019 was $3.7 billion. Prosper Funding had accrued $0.4 million and $0.9 million as of December 31, 2019 and 2018 respectively in regard to this obligation. Regulatory Contingencies Prosper Funding accrues for contingencies when a loss from such contingencies is probable and the amount of loss can be reasonably estimated. In determining whether a loss is probable and if it is possible to quantify the amount of the estimated loss, Prosper Funding reviews and evaluates its litigation and regulatory matters on at least a quarterly basis in light of potentially relevant factual and legal developments. If Prosper Funding determines that an unfavorable outcome is not probable or that the amount of a loss cannot be reasonably estimated, Prosper Funding does not accrue for a potential litigation loss. If an unfavorable outcome is probable and Prosper Funding can estimate a range of outcomes, PFL records the amount management considers to be the best estimate within the range of potential losses that are both probable and estimable; however, if management cannot quantify the amount of the estimated loss, then PFL records the low end of the range of those potential losses. SEC Inquiry In April 2017, we became aware of an error in the annualized net return and seasoned annualized net return numbers displayed to Note investors. Prosper was advised by the SEC that it was investigating whether violations of federal securities laws had occurred in connection with the error. On April 19, 2019, the SEC accepted an offer of settlement from PFL to resolve the matter. Under the settlement, the SEC alleged a violation of Section 17(a)(2) of the Securities Act and ordered PFL to cease and desist from any future violations of that provision. PFL neither admitted nor denied any wrongdoing, and agreed to pay a civil monetary penalty of $3.0 million. The penalty of $3.0 million was paid in full in April 2019. West Virginia Matter In January 2018, the Attorney General of the State of West Virginia (the “Attorney General”) initiated discussions regarding certain acts and practices of PMI and PFL that the Attorney General asserts may have violated the West Virginia Consumer Credit and Protection Act (the “Consumer Act”), to which Prosper responded with such information as was requested by the Attorney General. Following a period of more than a year with limited to no communication, in February 2020, Prosper received a proposed Assurance of Discontinuance (an “AOD”) from the Attorney General requesting that, without in any way admitting that any of its prior practices were in violation of the Consumer Act, Prosper agree to certain terms and conditions regarding its past and potential future conduct of its business with respect to customers in West Virginia, including a release by the Attorney General of any claims it may have related to the matters identified in the AOD. Prosper is evaluating and intends to discuss the proposed terms in the AOD with the Attorney General. We cannot predict the outcome of the matter and any potential fines or penalties, if any, that may arise from the matter. Further, we are unable to estimate a range of outcomes and as a result no accrual has been made. No loans have been originated through the Prosper platform to West Virginians since June 2016. |
Related Parties
Related Parties | 12 Months Ended |
Dec. 31, 2019 | |
Entity Information [Line Items] | |
Related Parties | Related PartiesSince Prosper’s inception, it has engaged in various transactions with its directors, executive officers and holders of more than 10% of its voting securities, and with immediate family members and other affiliates of its directors, executive officers and 10% stockholders. Prosper believes that all of the transactions described below were made on terms no less favorable to Prosper than could have been obtained from unaffiliated third parties. Prosper’s executive officers, directors who are not executive officers and certain affiliates participate in its marketplace by placing bids and purchasing Notes. The aggregate amount of the Notes purchased and the income earned by parties deemed to be affiliates and related parties of Prosper as of are summarized below (in thousands): Aggregate Purchases Interest Earned 2019 2018 2019 2018 Executive officers and management $ 23 $ 29 $ 5 $ 2 Directors 464 421 56 45 $ 487 $ 450 $ 61 $ 47 The balance of Notes held by officers, directors who are not executive officers and certain affiliates are as follows (in thousands): December 31, 2019 2018 Executive officers and management $ 35 $ 32 Directors 682 569 $ 717 $ 601 |
Prosper Funding LLC | |
Entity Information [Line Items] | |
Related Parties | Related Parties Since inception, Prosper Funding has engaged in various transactions with its directors, executive officers, sole member, and immediate family members and other affiliates of its directors, executive officers and sole member. Prosper Funding believes that all of the transactions described below were made on terms no less favorable to Prosper Funding than could have been obtained from unaffiliated third parties. Prosper Funding’s executive officers and directors who are not executive officers participate in its marketplace by placing bids and purchasing Notes and Borrower Loans. The aggregate amount of the notes and Borrower Loans purchased and the income earned by parties deemed to be related parties of Prosper Funding as of December 31, 2019 and 2018 are summarized below (in thousands): Aggregate Purchases Interest Earned 2019 2018 2019 2018 Executive officers and management $ 23 $ 29 $ 5 $ 2 Directors — — — — $ 23 $ 29 $ 5 $ 2 The balance of Notes held by officers and directors who are not executives officers are as follows (in thousands): December 31, 2019 2018 Executive officers and management $ 35 $ 32 Directors — — $ 35 $ 32 |
Postretirement Benefit Plans
Postretirement Benefit Plans | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
Postretirement Benefit Plans | Postretirement Benefit PlansProsper has a 401(k) plan that covers all employees meeting certain eligibility requirements. The 401(k) plan is designed to provide tax-deferred retirement benefits in accordance with the provisions of Section 401(k) of the Internal Revenue Code. Eligible employees may defer up to 90% of eligible compensation up to the annual maximum as determined by the Internal Revenue Service. Prosper’s contributions to the plan are discretionary. During the years ended December 31, 2019, 2018 and 2017, Prosper contributed $2.3 million, $2.0 million and $2.2 million, respectively, to the 401(k) plan. |
Significant Concentrations
Significant Concentrations | 12 Months Ended |
Dec. 31, 2019 | |
Entity Information [Line Items] | |
Significant Concentrations | Significant Concentrations Prosper is dependent on third party funding sources such as banks, asset managers, and investment funds to provide the funds to allow WebBank to originate Borrower Loans that the third party funding sources will later purchase. Of all Borrower Loans originated in the year ended December 31, 2019, the largest party purchased a total of 9.4% of those loans. This compares to 43.7% for the largest party for the year ended December 31, 2018. Further, a significant portion of our business is dependent on funding through the Whole Loan Channel, for which 94% and 94% of Borrower Loans were originated through the Whole Loan Channel in the years ended December 31, 2019 and 2018, respectively. Prosper receives all of its transaction fee revenue from WebBank. Prosper earns a transaction fee from WebBank for our services in facilitating originations of Borrower Loans issued by WebBank. The rate of the transaction fee for each individual Borrower Loan is based on the term and credit grade of the Borrower Loan. No individual borrower or investor accounted for 10% or more of consolidated net revenue for any of the periods presented. |
Prosper Funding LLC | |
Entity Information [Line Items] | |
Significant Concentrations | Significant Concentrations Prosper Funding is dependent on third party funding sources such as banks, asset managers and investment funds to provide the funding to allow WebBank to originate loans that the third party funding sources will later purchase. Of all Borrower Loans originated in the year ended December 31, 2019, the largest party purchased a total of 9.4% of those loans. This compares to 43.7% for the year ended December 31, 2018. Further, a significant portion of our business is dependent on funding through the Whole Loan Channel. 94.0% and 94.0% of Borrower Loans were originated through the Whole Loan Channel in the years ending December 31, 2019 and 2018, respectively. |
Segments
Segments | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Segments | SegmentsOur chief operating decision maker reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. As such, the Company has a single reporting and operating segment. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Entity Information [Line Items] | |
Subsequent Events | Subsequent Events The Company has evaluated events through the date the consolidated financial statements were issued. Based on this evaluation, other than as recorded or disclosed within these consolidated financial statements and related notes, the Company has determined no additional subsequent events were required to be recognized or disclosed. |
Prosper Funding LLC | |
Entity Information [Line Items] | |
Subsequent Events | Subsequent EventsThe Company has evaluated events through the date the consolidated financial statements were issued. Based on this evaluation, other than as recorded or disclosed within these consolidated financial statements and related notes, the Company has determined no additional subsequent events were required to be recognized or disclosed. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Entity Information [Line Items] | ||
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements include the accounts of PMI and its wholly owned subsidiaries including PFL, Prosper Healthcare Lending LLC (“PHL”), BillGuard, Inc. (“BillGuard”), and its consolidated VIEs including Prosper Warehouse I Trust (“PWIT”), Prosper Warehouse II Trust (“PWIIT”), Prosper Marketplace Issuance Trust, Series 2019-1 (“PMIT 2019-1”), Prosper Marketplace Issuance Trust, Series 2019-2 (“PMIT 2019-2”) and Prosper Marketplace Issuance Trust, Series 2019-4 (“PMIT 2019-4”). All intercompany balances and transactions between PMI and its subsidiaries have been eliminated in consolidation. PMI and PFL’s financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). | |
Use of Estimates | Use of EstimatesThe preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the related disclosures, including contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. These estimates, judgments and assumptions include but are not limited to the following: valuation of Loans Held for Sale, Borrower Loans and associated Notes, Certificates Issued by Securitization Trust, valuation of servicing rights and loan trailing fee liability, valuation allowance on deferred tax assets, stock-based compensation expense, Intangible Assets, Goodwill, Convertible Preferred Stock Warrant Liability, Repurchase Obligations and contingent liabilities. These judgments, estimates and assumptions are inherently subjective in nature and actual results may differ from these estimates and assumptions. | |
Consolidation of Variable Interest Entities | Consolidation of Variable Interest Entities A variable interest entity (VIE) is a legal entity that has either a total equity investment that is insufficient to finance its activities without additional subordinated financial support or whose equity investors lack the characteristics of a controlling financial interest. Prosper’s variable interest arises from contractual, ownership or other monetary interests in the entity, which change with fluctuations in the fair value of the entity’s net assets. A VIE is consolidated by its primary beneficiary, which is the party that has both the power to direct the activities that most significantly impact the VIE’s economic performance, and the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. Prosper consolidates a VIE when it is deemed to be the primary beneficiary. Prosper assesses whether or not it is the primary beneficiary of a VIE on an ongoing basis. | |
Transfers of Financial Assets | Transfers of Financial Assets Prosper accounts for transfers of financial assets as sales when it has surrendered control over the transferred assets. Control is generally considered to have been surrendered when the transferred assets have been legally isolated from Prosper, the transferee has the right to pledge or exchange the assets without any significant constraints, and Prosper has not entered into a repurchase agreement, does not hold unconditional call options and has not written put options on the transferred assets. In assessing whether control has been surrendered, Prosper considers whether the transferee would be a consolidated affiliate and the impact of all arrangements or agreements made contemporaneously with, or in contemplation of the transfer, even if they were not entered into at the time of transfer. Prosper measures gain or loss on sale of financial assets as the net proceeds received on the sale less the carrying amount of the loans sold. The net proceeds of the sale include the fair value of any assets obtained or liabilities incurred as part of the transaction, including, but not limited to Servicing Assets, retained securities, and recourse obligations. | |
Fair Value Measurement | Fair Value Measurement Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Prosper uses fair value measurements in its fair value disclosures and to record Available for Sale Investments, Borrower Loans, Loans Held for Sale, Servicing Assets, Notes, Certificates Issued by Securitization Trust, and Convertible Preferred Stock Warrant Liability at fair value on a recurring basis. The fair value hierarchy includes a three-level classification, which is based on whether the inputs to the valuation methodology used for measurement are observable: Level 1 — Quoted market prices in active markets for identical assets or liabilities. Level 2 — Inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. Level 3 — Unobservable inputs. When developing fair value measurements, Prosper maximizes the use of observable inputs and minimizes the use of unobservable inputs. However, for certain instruments Prosper must utilize unobservable inputs in determining fair value due to the lack of observable inputs in the market, which requires greater judgment in measuring fair value. In instances where there is limited or no observable market data, fair value measurements for assets and liabilities are determined using assumptions that management believes a market participant would use in pricing the asset or liability. As observable market prices are not available for the Borrower Loans, Loans Held for Sale, Notes, Certificates Issued by Securitization Trust and Servicing Assets, or for similar assets and liabilities, Prosper believes the Borrower Loans, Loans Held for Sale, Notes, Certificates Issued by Securitization Trust and Servicing Assets are considered level 3 financial instruments. Prosper primarily uses a discounted cash flow model to estimate their fair value, and key assumptions used in valuation include default rates and prepayment rates derived from historical performance and discount rates based on estimates of the rates of return that investors would require when investing in financial instruments with similar characteristics. The obligation to pay principal and interest on any series of Notes is equal to the loan payments, if any, that are received on the corresponding Borrower Loan, net of our servicing fee which is 1.0% of the outstanding balance. The fair value election for Notes and Borrower Loans allows both the assets and the related liabilities to receive similar accounting treatment for expected losses which is consistent with the subsequent cash flows to investors that are dependent upon borrower payments. As such, the fair value of a series of Notes is approximately equal to the fair value of the corresponding Borrower Loan, adjusted for the 1.0% servicing fee and the timing of loan purchase, Note issuance and borrower payments subsequently disbursed to such Note holders. As a result, the valuation of the Notes uses the same methodology and assumptions as the Borrower Loans, except that the Notes incorporate the 1.0% servicing fee and any differences in timing in payments. The | |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash includes various unrestricted deposits with investment-grade rated financial institutions. Cash equivalents consist of highly liquid marketable securities with original maturities of three months or less at the time of purchase and consist primarily of money market funds, commercial paper, US treasury securities and US agency securities. Cash equivalents are recorded at cost, which approximates fair value. At times, our cash balances may exceed federally insured amounts and potentially subject the Company to a concentration of credit risk. The Company believes that no significant concentration of credit risk exists with respect to these balances based on its assessment of the creditworthiness of these financial institutions. | |
Restricted Cash | Restricted Cash Restricted cash consists primarily of cash deposits and short term certificate of deposit accounts held as collateral as required for long term leases, loan funding and servicing activities, and cash that investors or Prosper have on the marketplace that has not yet been invested in Borrower Loans or disbursed to the investor. | |
Short Term Investments | Short Term InvestmentsShort Term Investments which are included in Prepaid and Other Assets consist of certificates of deposit with a term greater than three months but less than a year that are held as collateral as required for loan funding and servicing activities. | |
Available for Sale Investments | Available for Sale Investments Available for Sale Investments are recorded at fair value with unrealized gains and losses reported, net of taxes, in Accumulated Other Comprehensive Income (Loss) included in stockholders' equity unless management determines that an investment is other-than-temporarily impaired. Management evaluates whether impairment of Available for Sale debt securities is other than temporary impairment (“OTTI”) on a quarterly basis. Debt securities with unrealized losses are considered OTTI if Prosper intends to sell the investment or if it is more likely than not that it will be required to sell such investment before any anticipated recovery. If management determines that an investment is OTTI under these circumstances, the impairment recognized in earnings is measured as the entire difference between the amortized cost and then-current fair value. | |
Borrower Loans, Loans Held for Sale, Notes and Certificates Issued by Securitization Trust | Borrower Loans, Loans Held for Sale, Notes and Certificates Issued by Securitization Trust Borrower Loans are funded either through the Note Channel or through the Whole Loan Channel. Through the Note Channel, Prosper purchases Borrower Loans from WebBank then issues Notes to investors and holds the Borrower Loans until maturity. The obligation to repay a series of Notes issued through the Note Channel is dependent upon the repayment of the associated Borrower Loans. Borrower Loans funded and Notes issued through the Note Channel are carried on Prosper’s Consolidated Balance Sheets as assets and liabilities, respectively. In 2019, Prosper began financing the purchase of Borrower Loans through the Whole Loan Channel through securitization transactions, which issued senior notes, risk retention interests, and residual certificates. Associated securitization trusts are deemed consolidated VIEs, and as a result the Borrower Loans held in the securitization trusts are included in “Borrower Loans, at Fair Value”, senior notes sold to third party investors in “Notes Issued by Securitization Trust”, and the risk retention interest and residual certificates held by third party investors in “Certificates Issued by Securitization Trust, at Fair Value” in the Consolidated Balance Sheets. Refer to Note 7 - Securitization for additional disclosures. Prosper uses Warehouse Lines to purchase Loans Held for Sale that may be subsequently contributed to securitization transactions or sold to investors. Loans Held for Sale are included in “Loans Held for Sale, at Fair Value” in the Consolidated Balance Sheets. See Note 11 - Debt for more details on Warehouse Lines. Borrower Loans and Loans Held for Sale are purchased from WebBank. Prosper places Borrower Loans and Loans Held for Sale on non-accrual status when they are 120 days past due. When a loan is placed on non-accrual status, Prosper stops accruing interest and reverses all accrued but unpaid interest as of such date. Additionally, Prosper charges-off Borrower Loans and Loans Held for Sale when they are 120 days past due. The fair value of loans 120 or more days past due generally consists of the expected recovery from debt sales in subsequent periods. Prosper has elected the fair value option for Borrower Loans, Loans Held for Sale, Notes, and Certificates Issued by Securitization Trust. Changes in fair value of Borrower Loans funded through the Note Channel are largely offset by the changes in fair value of Notes due to the borrower payment-dependent design of the Notes. Changes in fair value of Borrower Loans held in consolidated securitization trusts are partially offset by changes in fair value of the Certificates Issued by Securitization Trust. Changes in fair value of Loans Held for Sale are recorded through Proper's earnings and Prosper collects interest on Loans Held for Sale. Changes in fair value of Borrower Loans, Loans Held for Sale, Notes, and Certificates Issued by Securitization Trust are included in “Change in Fair Value of Financial Instruments, Net” on the Consolidated Statements of Operations. | |
Loan Servicing Assets and Liabilities | Loan Servicing Assets and Liabilities Prosper records Servicing Assets and Liabilities at their estimated fair values for servicing rights retained when Prosper sells Borrower Loans to unrelated third-party buyers. The change in fair value of Servicing Assets and Liabilities is recognized in Servicing Fees, Net. The gain or loss on a loan sale is recorded in Gain on Sale of Borrower Loans while the fair value of the servicing rights, which is based on the degree to which the contractual loan servicing fee is above or below an estimated market servicing rate is recorded in Servicing Assets or Liabilities. Servicing assets and liabilities are recorded in Servicing Assets and Other Liabilities, respectively, on the Consolidated Balance Sheets. Prosper uses a discounted cash flow model to estimate the fair value of the loan Servicing Assets or Liabilities which considers the contractual projected servicing fee revenue that Prosper earns on the Borrower Loans, the estimated market servicing rates to service such loans, the prepayment rates, the default rates and the current principal balances of the Borrower Loans. | |
Property and Equipment | Property and Equipment Property and Equipment consists of computer equipment, office furniture and equipment, leasehold improvements, software purchased or developed for internal use and web site development costs. Property and Equipment is stated at cost, less accumulated depreciation and amortization, and is computed using the straight-line method based upon estimated useful lives of the assets. Estimated useful lives of the assets are as follows: Furniture and fixtures 7 years Office equipment 5 years Computers and equipment 3 years Leasehold improvements 5 - 8 years Software and website development costs 1 - 5 years The costs to develop software for the website and other internal uses are capitalized when management has authorized and committed project funding, when preliminary development efforts are successfully completed, and when it is probable that the project will be completed and the software will be used as intended. Capitalized software and website development costs primarily include software licenses acquired, fees paid to outside consultants and salaries and payroll-related costs for employees directly involved in the development efforts. Costs incurred prior to meeting these criteria, together with costs incurred for training and maintenance, are expensed. Costs incurred for upgrades and enhancements that are considered to be probable to result in additional functionality are capitalized. Capitalized costs are included in Property and Equipment and amortized to expense using the straight-line method over their expected lives. Software and website development assets are evaluated for impairment whenever events or changes in | |
Leases | Leases Management determines if an arrangement is a lease at inception. Operating lease right-of-use (“ROU”) assets and operating lease liabilities are included on the Consolidated Balance Sheets in Property and Equipment, Net and in Other Liabilities, respectively. For certain leases with original terms of twelve months or less, PMI recognizes the lease expense as incurred and does not recognize ROU assets and lease liabilities. If a contract contains a lease, management evaluates whether it should be classified as an operating or finance lease. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. As most of PMI's leases do not provide an implicit rate, management uses an incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The operating lease ROU assets are evaluated for impairment utilizing the same impairment model used for Property and Equipment. | |
Goodwill and Intangibles | Goodwill and Intangibles Goodwill associated with business combinations is computed by recognizing the portion of the purchase price that is not tied to individually identifiable and separately recognizable assets. Goodwill is not amortized but is tested for impairment annually or whenever indications of impairment exist. Annual impairment testing occurs on October 1. Impairment exists whenever the carrying value of Goodwill exceeds its implied fair value. Adverse changes in impairment indicators such as loss of key personnel, increased regulatory oversight or unplanned changes in operations could result in impairment. PMI did not recognize any Goodwill impairments during the years ended December 31, 2019, 2018 and 2017. three three | |
Payable to Investors | Payable to Investors Payable to Investors primarily represents the obligation to investors related to cash held in an account for the benefit of investors and payments-in-process received from borrowers. | |
Warehouse Lines and Notes Issued by Securitization Trust | Warehouse Lines and Notes Issued by Securitization Trust Warehouse Lines and Notes Issued by Securitization Trust are carried at amortized cost. Prosper defers specific incremental costs directly related to entering into the Warehouse Lines and issuing Notes Issued by Securitization Trust and subsequently amortizes them into interest expense over the life of the arrangements. | |
Convertible Redeemable Preferred Stock Warrant Liabilities | Convertible Preferred Stock Warrant Liability Freestanding warrants to acquire shares that may be redeemable are accounted for in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 480, Distinguishing Liabilities from Equity (“ASC 480”). Under ASC 480, vested freestanding warrants to purchase the Company’s convertible redeemable preferred stock are classified as a liability on the Consolidated Balance Sheets and carried at fair value because the warrants may conditionally obligate the Company to transfer assets at some point in the future. The Company records the warrants at fair value on issuance. The warrants are subject to remeasurement to fair value at each balance sheet date, and any change in their fair value is recognized as “Change in Fair Value of Convertible Preferred Stock Warrants” in the Consolidated Statements of Operations. The Company will continue to adjust the liability for changes in fair value until the earlier of the exercise or expiration of the warrants, the completion of a deemed liquidation event or the conversion of convertible redeemable preferred stock into Common Stock. | |
Loan Trailing Fee Liability | Loan Trailing Fee Liability On July 1, 2016, Prosper signed a series of agreements with WebBank which, among other things, includes an additional program fee (the “Loan Trailing Fee”) paid to WebBank in connection with the performance of each loan sold to Prosper. These agreements became effective as of August 1, 2016. The Loan Trailing Fee is dependent on the amount and timing of principal and interest payments made by borrowers of the underlying loans, irrespective of whether the loans are sold by Prosper, and gives WebBank an ongoing financial interest in the performance of the loans it originates. This fee is paid by Prosper to WebBank over the term of the respective loans and is a function of the principal and interest payments made by borrowers of such loans. In the event that principal and interest payments are not made with respect to any loan, Prosper is not required to make the related Loan Trailing Fee payment. The obligation to pay the Loan Trailing Fee for any loan sold to Prosper is recorded at fair value at the time of the origination of such loan within Other Liabilities and recorded as a reduction of “Transaction Fees, net”. Any changes in the fair value of this liability are recorded in “Servicing Fees, Net” on the consolidated statements of operations. The fair value of the Loan Trailing Fee represents the present value of the expected monthly Loan Trailing Fee payments, which takes into consideration certain assumptions related to expected prepayment rates and defaults rates. | |
Revenue Recognition | Revenue Recognition Revenue primarily results from transaction and Servicing Fees and net interest income earned. Fees include Transaction Fees for our services performed on behalf of WebBank to originate a loan. PMI also has other smaller sources of revenue reported as Other Revenues, including referral fees, and securitization fees. Transaction Fees Prosper has a customer contract with WebBank to facilitate the origination of all Borrower Loans through Prosper’s marketplace. In exchange for these services, Prosper earns a transaction fee from WebBank that is recognized when performance is complete and upon the successful origination of a Borrower Loan. The transaction fee Prosper earns is determined by the term and credit grade of the Borrower Loan that is facilitated on Prosper’s marketplace, and ranges from 1.00% to 5.00% of the original principal amount of each Borrower Loan that WebBank originates. Prosper records the transaction fee net of any fees paid to WebBank because Prosper does not receive an identifiable benefit from WebBank other than the borrower loan that has been recognized at fair value. Servicing Fees Investors who purchase Borrower Loans from Prosper typically pay Prosper a servicing fee which is currently set at 1.075% per annum of the outstanding principal balance of the borrower loan prior to applying the current payment. The servicing fee compensates Prosper for the costs incurred in servicing the borrower loan, including managing payments from borrowers, managing payments to investors and maintaining investors’ account portfolios. Prosper records Servicing Fees from investors as a component of operating revenue when received. Gain on Sale of Borrower Loans Prosper recognizes gains or losses on the sale of Borrower Loans when it sells Borrower Loans to third parties. Prosper measures gain or loss on sale of Borrower Loans as the net proceeds received on a sale less the carrying amount of the Borrower Loans sold. The net proceeds of the sale represent the fair value of any assets obtained or liabilities incurred as part of the transaction, including, but not limited to Servicing Assets, retained securities, and repurchase obligations. Interest Income on Borrower Loans and Interest Expense on Financial Instruments Prosper recognizes interest income on Borrower Loans originated through the Note Channel and interest expense on the corresponding Notes using the accrual method based on the stated interest rate to the extent Prosper believes it to be collectable. Similarly, Prosper recognizes interest income on Loans Held for Sale and interest expense on the Warehouse Line using the accrual method based on the stated interest rate to the extent Prosper believes it to be collectable. Other Revenues Other Revenues consist primarily of securitization fees and credit referral fees. Credit referral fees are where partner companies pay us an agreed upon amount for successful referrals of customers from our marketplace. The transaction price is a fixed amount per referral and is recognized by the Company upon a successful referral. Securitization fees represent fees Prosper earns to facilitate securitizations for purchasers of Borrower Loans and is recognized as “Other Revenues” when the securitization is completed. In some instances Prosper may also provide a guarantee, which requires a determination of the fair value of the guarantee and an allocation of the remaining transaction price to the securitization performance obligation. As of December 31, 2019, Prosper had no contract assets, contract liabilities or deferred contract costs. As of December 31, 2019, Prosper had no unsatisfied performance obligations related to Transaction Fees or Other Revenues. | |
Advertising Costs | Advertising CostsAdvertising costs are expensed when incurred and are included in “Sales and Marketing” expense in the accompanying Consolidated Statements of Operations. | |
Stock-Based Compensation | Stock-Based Compensation Management determines the fair value of the Company's stock options issued to employees on the date of grant using the Black-Scholes option pricing model, which is impacted by the fair value of Common Stock as well as by changes in assumptions that include, but are not limited to, the expected Common Stock price volatility over the term of the option awards, the expected term of the awards, risk-free interest rates and the expected dividend yield. PMI recognizes compensation expense for stock-based awards on a straight-line basis over the period during which an employee is required to provide services in exchange for the award (the vesting period of the award). Stock-based compensation expense is recognized only for those awards expected to vest. PMI estimates future forfeitures at the date of grant and revises the estimates, if necessary, in subsequent periods if actual forfeitures differ from estimates. Stock-based awards issued to non-employees are marked-to-market up until the point that the awards measurement period has been achieved. Compensation expense for stock options issued to non-employees is calculated using the Black-Scholes option pricing model and is recorded over the vesting period of the award. | |
Foreign Currency Transactions | Foreign Currency Transactions The functional currency of Prosper's international subsidiary is the U.S. dollar. For this subsidiary, foreign currency denominated monetary assets and liabilities are remeasured into U.S. dollars at current exchange rates and foreign currency denominated nonmonetary assets and liabilities are remeasured into U.S. dollars at historical exchange rates. Gains or losses from foreign currency remeasurement and settlements are included in “General and Administrative” expense in the Consolidated Statements of Operations. Repurchase of Convertible Preferred Stock and Common Stock | |
Income Taxes | Income Taxes The asset and liability method is used to account for income taxes. Under this method, deferred income tax assets and liabilities are based on the differences between the financial statement carrying values and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Prosper’s policy is to include interest and penalties related to gross unrecognized tax benefits within its provision for income taxes. U.S. Federal, Israel, California and other state income tax returns are filed. Prosper is not currently undergoing any income tax examinations. Due to the cumulative the net operating loss, generally all tax years remain open. Prosper recognizes benefits from uncertain tax positions only if management believes that it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. | |
Other Expense (Income), Net | Other Expense (Income), Net Other Expense, Net includes interest income from Available for Sale Investments, sublease income, SEC settlement costs and contract termination costs that are expected to be non-recurring and not part of restructuring activities. | |
Restructuring Charges | Restructuring Charges Restructuring Charges consist of severance costs and contract termination-related costs and impairment charges associated with the severance actions. A liability for severance costs is typically recognized when the plan of termination has been communicated to the affected employees and is measured at its fair value at the communication date. Contract termination costs consist primarily of costs that will continue to be incurred under operating leases for their remaining terms without economic benefit to the Company. A liability for contract termination costs is recognized at the date the Company ceases using the rights conveyed by the lease contract and is recorded at fair value, which is determined based on the remaining contractual lease rentals reduced by estimated sublease rentals. | |
Comprehensive Income | Comprehensive Income Marketable debt securities are generally considered available-for-sale and are carried at fair value, based on quoted market prices or other readily available market information. Gains and losses are recognized when realized using the specific identification method and included in “Other Expense (Income)”, Net in the Consolidated Statements of Operations. Unrealized gains and losses, net of taxes, are included in Accumulated Other Comprehensive Income, which is reflected as a separate component of Stockholders’ Deficit in Prosper's Consolidated Balance Sheets. If management has determined that an other-than-temporary decline in fair value has occurred, the amount of the decline that is related to an identified loss is recognized in earnings. Prosper monitors its investment portfolio for potential impairment on a quarterly basis. | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Standards Adopted In The Current Period In June 2018, the FASB issued ASU No. 2018-07, “Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting”. The ASU is intended to reduce the cost and complexity and to improve financial reporting for nonemployee share-based payments. The ASU expands the scope of Topic 718, Compensation-Stock Compensation, which currently only includes share-based payments to employees, to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. Prosper adopted the standard effective January 1, 2019. The adoption of this standard did not have a material impact on Prosper’s consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” which requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. Prosper adopted the standard effective January 1, 2019. In accordance with ASU 2018-11, “Leases (Topic 842), Target Improvements”, Prosper has elected not to restate prior periods and has presented the cumulative effect of applying the new standard as an adjustment to the opening balance of retained earnings on January 1, 2019. The standard had a material impact on the Company's Consolidated Balance Sheets, but did not materially impact the Consolidated Statements of Operations. The most significant impact is the recognition of ROU assets and lease obligation liabilities for operating leases. Additionally, Prosper recorded an impairment charge to its ROU asset upon adoption due to existing sublease arrangements that were entered into at a loss. The impairment charge did not have a material impact as it will be offset by a reduction of the existing restructuring liability for those leases. In the adoption of the various accounting standards associated with Topic 842, Prosper has elected the package of practical expedients, which allows the Company not to reassess (1) whether any expired or existing contracts as of the adoption date are or contain a lease, (2) lease classification for any expired or existing leases as of the adoption date and (3) initial direct costs for any existing leases as of the adoption date. Prosper did not elect to apply the hindsight practical expedient when determining lease term and assessing impairment of right-of-use assets. Prosper also elected a practical expedient that allowed the Company to not separate non-lease components from lease components and instead to account for each lease and non-lease component as a single lease component. The adoption of ASU 2016-02 on January 1, 2019 resulted in the recognition of ROU assets of approximately $16.2 million, lease liabilities for operating leases of approximately $21.7 million, a reduction in existing Other Liabilities of $5.5 million related to deferred rent and restructuring liabilities, and no cumulative-effect adjustment on retained earnings on Prosper's Consolidated Balance Sheets, with no material impact to its Consolidated Statements of Operations. Accounting Standards Issued, to be Adopted by the Company in Future Periods In June 2016, the FASB amended guidance related to impairment of financial instruments as part of ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, which will be effective for interim and annual periods beginning after December 15, 2019. For loans accounted for at amortized cost, the guidance replaces the incurred loss impairment methodology with an expected credit loss model for which a company recognizes an allowance based on the estimate of expected credit loss. Because Prosper accounts for Borrower Loans at fair value, Prosper expects no impact on its loan portfolios upon adoption. For certain Available for Sale Investments, the guidance will require recognition of expected credit losses through recording an allowance for credit losses. As Prosper has no Available for Sale Investments at the effective date of Topic 326, Prosper does not expect the targeted amendments to the Available for Sale Investments debt securities impairment model to have an impact on its consolidated financial statements. Based on the composition of Prosper's Accounts Receivable and historical collection activity, we do not expect the adoption of Topic 326 would have a material impact on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” The standard eliminates Step 2 from the Goodwill impairment test which requires a hypothetical purchase price allocation. Prosper will continue to have the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The standard is effective for interim and annual periods beginning after December 15, 2019 and early adoption is permitted for interim or annual Goodwill impairment tests performed on testing dates after January 1, 2017. The standard should be applied on a prospective basis. Prosper does not expect the adoption of this guidance to impact its consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement.” Entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but public companies will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. ASU No. 2018-13 is effective for all entities for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years, but entities are permitted to early adopt either the entire standard or only the provisions that eliminate or modify the requirements. The guidance only affects disclosures in the notes to the consolidated financial statements and will not affect Prosper’s consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” This ASU aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within that fiscal year and early adoption is permitted. Prosper will prospectively capitalize all eligible costs related to cloud computing arrangements starting January 1, 2020. In March 2019, the FASB issued ASU No. 2019-01, “Leases (Topic 842): Codification Improvements.” This ASU aligns the fair value treatment of the underlying asset by lessors that are not manufacturers or dealers as defined under Topic 842, presentation on the Statement of Cash Flows for sales and direct financing leases, and a clarification of interim disclosure requirements in the year of adoption, among other things. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within that fiscal year and early adoption is permitted. Prosper does not expect the adoption of this guidance to have a material impact on its consolidated financial statements. | |
Prosper Funding LLC | ||
Entity Information [Line Items] | ||
Basis of Presentation | Basis of Presentation Prosper Funding’s consolidated financial statements include the accounts of Prosper Funding and its wholly-owned subsidiary PAH. All intercompany balances and transactions between Prosper Funding and PAH have been eliminated in consolidation. Prosper Funding’s financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). | |
Use of Estimates | Use of Estimates The preparation of Prosper Funding’s consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and the related disclosures at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. These estimates, judgments and assumptions include, but are not limited to, the following: valuation of Loans Held for Sale, Borrower Loans and associated Notes, valuation of servicing rights, valuation of loan trailing fee liability, repurchase obligations, and contingent liabilities. Prosper Funding bases its estimates on historical experience from all Borrower Loans and on various other assumptions that it believes to be reasonable under the circumstances. Actual results could differ materially from estimates. | |
Transfers of Financial Assets | ||
Restricted Cash | Restricted Cash Restricted Cash consists primarily of cash deposits and short term certificates of deposit accounts for loan funding and servicing activities, and cash that investors or Prosper Funding has on the marketplace that has not yet been invested in Borrower Loans or disbursed to the investor. | |
Short Term Investments | Short Term Investments Short term investments consists of certificates of deposit with a term greater than three months but less than a year that are held as collateral as required for loan funding and servicing activities. | |
Borrower Loans, Loans Held for Sale, Notes and Certificates Issued by Securitization Trust | Borrower Loans, Loans Held for Sale and Notes Through the Note Channel, Prosper Funding purchases Borrower Loans from WebBank then issues notes, and holds the Borrower Loans as a receivable until maturity. The obligation to repay a series of notes issued through the Note Channel is dependent upon the repayment of the associated Borrower Loans. Borrower loans funded and notes issued through the Note Channel are carried on Prosper Funding’s Consolidated Balance Sheets as assets and liabilities, respectively. Prosper Funding places Borrower Loans and Loans Held for Sale on non-accrual status when they are 120 days past due. When a loan is placed on non-accrual status, Prosper stops accruing interest and reverses all accrued but unpaid interest as of such date. Additionally, Prosper charges-off Borrower Loans and Loans Held for Sale when they are 120 days past due. The fair value of loans 120 days past due generally consists of the expected recovery from debt sales in subsequent periods. Management has elected the fair value option for Borrower Loans, Loans Held for Sale, and Notes. Changes in fair value of Borrower Loans are largely offset by the changes in fair value of Notes due to the borrower payment-dependent design of the Notes. Changes in fair value of Borrower Loans, Loans Held for Sale and Notes are included in “Change in Fair Value of Borrower Loans, Loans Held for Sale and Notes, Net” on the Consolidated Statements of Operations. | |
Loan Servicing Assets and Liabilities | Loan Servicing Assets and Liabilities Prosper Funding records Servicing Assets and liabilities at their estimated fair values for servicing rights retained when Prosper Funding sells Borrower Loans to unrelated third-party buyers. The change in fair value of Servicing Assets and liabilities is recognized in revenue as Servicing Fees, Net. The gain or loss on a loan sale is recorded in Gain (Loss) on Sale of Borrower Loans while the fair value of the servicing rights, which is based on the degree to which the contractual loan servicing fee is above or below an estimated market loan servicing rate, is recorded in Servicing Assets or Liabilities. Servicing assets and liabilities are recorded in Servicing Assets and Other Liabilities, respectively, on the Consolidated Balance Sheets. | |
Software and Website Development | Software and Website Development Software and website development represents the software and website development costs that PMI transferred to Prosper Funding. Prosper Funding does not develop any of its own software or its website. Software and website development re included in Property and Equipment, Net and amortized to expense using the straight-line method over their expected lives which is generally one | |
Payable to Investors | Payable to Investors Payable to Investors primarily represents the Company's obligation to investors related to cash held in an account for the benefit of investors and payments-in-process received from borrowers. | |
Revenue Recognition | Revenue Recognition Revenue primarily results from fees, net interest earned and gains on the sale of Borrower Loans. Fees consist of related party administrative fees and Servicing Fees paid by investors. The Company also has other smaller sources of revenue reported as Other Revenues including fees charged in relation to securitizations by outside investors. Administration Agreement License Fees Prosper Funding primarily generates revenues through license fees it earns through an Administration Agreement with PMI. The Administration Agreement contains a license granted by Prosper Funding to PMI that entitles PMI to use the platform for and in relation to: (i) PMI’s performance of its duties and obligations under the Administration Agreement relating to corporate administration, loan platform services, loan and Note servicing and marketing, and (ii) PMI’s performance of its duties and obligations to WebBank in relation to loan origination and funding. The license fees are based on the number of listings that are posted to the platform. Service Fees Investors who purchase Borrower Loans from Prosper through the Whole Loan Channel typically pay Prosper a servicing fee which is currently set at 1.075% per annum of the outstanding principal balance of the Borrower Loan prior to applying the current payment. The servicing fee compensates Prosper for the costs incurred in servicing the Borrower Loan, including managing payments from borrowers, managing payments to investors and maintaining investors’ account portfolios. Prosper records Servicing Fees from investors as a component of operating revenue when received. Gain (Loss) on Sale of Borrower Loans PFL recognizes gains or losses on the sale of Borrower Loans when it sells Borrower Loans to third parties. PFL measures gain or loss on sale of Borrower Loans as the net proceeds received on the sale less the carrying amount of the Borrower Loans sold. The net proceeds of the sale represent the fair value of any assets obtained or liabilities incurred as part of the transaction, including, but not limited to Servicing Assets, retained securities, and repurchase obligations. Interest Income on Borrower Loans and Interest Expense on Notes Prosper Funding recognizes interest income on Borrower Loans originated through the Note Channel and interest expense on the corresponding Notes using the accrual method based on the stated interest rate to the extent Prosper Funding believes it to be collectable. | |
Administration Fee Expense - Related Party | Administration Fee Expense - Related Party Pursuant to the Administration Agreement between Prosper Funding and PMI, PMI manages the marketplace on behalf of Prosper Funding. Accordingly each month, Prosper Funding is required to pay PMI an administration fee that is based on PMI’s (a) finance and legal personnel costs, (b) number of Borrower Loans originated through the Marketplace, (c) Servicing Fees collected by or on behalf of Prosper Funding, and (d) nonsufficient funds fees collected by or on behalf of Prosper Funding. In addition, under a second Administration Agreement between PMI and PAH, a wholly owned subsidiary of Prosper Funding, PAH is required to pay PMI an annual fee for PMI being the administrator of PAH’s operations. | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Standards Adopted in the Current Period No accounting standards were adopted in the current period for Prosper Funding LLC. Accounting Standards Issued, to be Adopted in Future Periods In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement.” Entities will no longer be required to disclose the amount of and reasons for transfers between level 1 and level 2 of the fair value hierarchy, but public companies will be required to disclose the range and weighted average used to develop significant unobservable inputs for level 3 fair value measurements. ASU No. 2018-13 is effective for all entities for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years, but entities are permitted to early adopt either the entire standard or only the provisions that eliminate or modify the requirements. The guidance only affects disclosures in the notes to the consolidated financial statements and will not affect Prosper’s Consolidated Balance Sheets or Consolidated Statements of Operations. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Estimated Useful Lives of Assets | Estimated useful lives of the assets are as follows: Furniture and fixtures 7 years Office equipment 5 years Computers and equipment 3 years Leasehold improvements 5 - 8 years Software and website development costs 1 - 5 years |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Entity Information [Line Items] | |
Property and Equipment, Net | Property and Equipment, Net consist of the following (in thousands): December 31, 2019 2018 Operating lease right-of-use assets 16,213 — Computer equipment 13,420 15,193 Internal-use software and website development costs 28,904 22,505 Office equipment and furniture 2,999 3,015 Leasehold improvements 7,158 7,157 Assets not yet placed in service 2,445 2,745 Property and equipment 71,139 50,615 Less: Accumulated depreciation and amortization (39,843) (35,342) Total Property and Equipment, Net $ 31,296 $ 15,273 |
Prosper Funding LLC | |
Entity Information [Line Items] | |
Property and Equipment, Net | Property and Equipment consist of the following (in thousands): December 31, 2019 2018 Internal-use software and web site development costs $ 24,930 $ 22,505 Less: Accumulated depreciation and amortization (17,381) (16,079) $ 7,549 $ 6,426 |
Borrower Loans and Notes, at _2
Borrower Loans and Notes, at Fair Value (Tables) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Entity Information [Line Items] | ||
Borrower Loans, Notes and Loans Held for Sale | As of December 31, 2019 and 2018, Borrower Loans and Loans Held for Sale, both at fair value, were as follows (in thousands): Borrower Loans Loans Held for Sale 2019 2018 2019 2018 Aggregate principal balance outstanding $ 647,209 $ 269,093 $ 143,261 $ 185,657 Fair value adjustments (13,190) (5,571) (1,235) (1,869) Fair value $ 634,019 $ 263,522 $ 142,026 $ 183,788 As of December 31, 2019 and 2018, Notes, at Fair Value, was as follows (in thousands): Notes 2019 2018 Aggregate principal balance outstanding $ 250,281 $ 272,430 Fair value adjustments (6,110) (8,427) Fair value 244,171 $ 264,003 | |
Prosper Funding LLC | ||
Entity Information [Line Items] | ||
Borrower Loans, Notes and Loans Held for Sale | The fair values of Borrower Loans were as follows (in thousands): December 31, 2019 2018 Aggregate principal balance outstanding $ 248,702 $ 269,093 Fair value adjustments (3,565) (5,571) $ 245,137 $ 263,522 The fair values of Notes were as follows (in thousands): December 31, 2019 2018 Aggregate principal balance outstanding $ 250,281 $ 272,430 Fair value adjustments (6,110) (8,427) $ 244,171 $ 264,003 |
Available for Sale Investment_2
Available for Sale Investments, at Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Amortized Cost, Gross Unrealized Gains and Losses and Fair Value of Securities Available for Sale | The amortized cost, gross unrealized gains and losses and fair value of Available for Sale Investments for the year ended December 31, 2018 are as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value December 31, 2018 Fixed maturity securities: Treasury Bills $ 17,940 $ — $ (3) $ 17,937 US Treasury securities $ 4,246 $ — $ (10) $ 4,236 $ 22,186 $ — $ (13) $ 22,173 |
Fair Value of Assets and Liab_2
Fair Value of Assets and Liabilities (Tables) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Entity Information [Line Items] | ||
Fair Value Hierarchy for Assets and Liabilities Measured at Fair Value | The following tables present the fair value hierarchy for assets and liabilities measured at fair value (in thousands): December 31, 2019 Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Assets: Borrower Loans $ — $ — $ 634,019 $ 634,019 Loans Held for Sale — — 142,026 142,026 Available for Sale Investments — — — — Servicing Assets — — 12,602 12,602 — — 788,647 788,647 Liabilities: Notes $ — $ — $ 244,171 $ 244,171 Servicing Liabilities — — — — Certificates Issued by Securitization Trust — — 52,168 52,168 Convertible Preferred Stock Warrant Liability — — 149,996 149,996 Loan Trailing Fee Liability — — 2,997 2,997 $ — $ — $ 449,332 $ 449,332 December 31, 2018 Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Assets: Borrower Loans $ — $ — $ 263,522 $ 263,522 Loans Held for Sale — — 183,788 183,788 Available for Sale Investments — 22,173 — 22,173 Servicing Assets — — 14,687 14,687 — 22,173 461,997 484,170 Liabilities: Notes $ — $ — $ 264,003 $ 264,003 Servicing Liabilities — — 12 12 Convertible Preferred Stock Warrant Liability — — 143,679 143,679 Loan Trailing Fee Liability — — 3,118 3,118 $ — $ — $ 410,812 $ 410,812 | |
Quantitative Information About Significant Unobservable Inputs | The following tables present quantitative information about the range of significant unobservable inputs used for the Company’s Level 3 fair value measurements at December 31, 2019: December 31, 2019 2018 Borrower Loans, Loans Held for Sale, and Notes Discount rate 4.4 % — 12.2 % 4.7 % — 13.8 % Default rate 2.1 % — 18.6 % 2.0 % — 15.8 % December 31, 2019 Certificates Issued by Securitization Trust Discount rate 4.0 % — 15.0 % Default rate 2.0 % — 17.0 % Prepayment rate 14.5 % — 33.0 % December 31, 2019 2018 Servicing Rights Discount rate 15.0 % — 25.0 % 15.0 % — 25.0 % Default rate 1.7 % — 18.8 % 1.6 % — 16.7 % Prepayment rate 16.5 % — 28.1 % 15.5 % — 25.1 % Market servicing rate (1) 0.625 % 0.625 % (1) Excludes collection fees that would be passed on to a hypothetical third-party servicer. As of December 31, 2019 and 2018, the market rate for collection fees and non-sufficient fund fees was assumed to be 6 basis points and 8 basis points, respectively, for a weighted-average total market servicing rate of 68.5 basis points and 70.5 basis points respectively. December 31, 2019 2018 Loan Trailing Fee Liability Discount rate 15.0 % — 25.0 % 15.0 % — 25.0 % Default rate 1.7 % — 18.8 % 1.6 % — 16.7 % Prepayment rate 16.5 % — 28.1 % 15.5 % — 25.1 % The following tables present quantitative information about the range of significant unobservable inputs used for Prosper Funding’s Level 3 fair value measurements: December 31, 2019 2018 Borrower Loans and Notes Discount rate 4.4 % — 12.1 % 4.7 % — 13.8 % Default rate 2.4 % — 17.7 % 2.0 % — 15.8 % December 31, 2019 2018 Servicing Assets Discount rate 15.0 % — 25.0 % 15.0 % — 25.0 % Default rate 1.7 % — 18.8 % 1.6 % — 16.7 % Prepayment rate 16.5 % — 28.1 % 15.5 % — 25.1 % Market servicing rate (1) 0.625 % 0.625 % (1) Excludes collection fees that would be passed on to a hypothetical third-party servicer. As of December 31, 2019 and 2018, the market rate for collection fees and non-sufficient fund fees was assumed to be 6 basis points and 8 basis points, respectively, for a weighted-average total market servicing rate of 68.5 basis points and 70.5 basis points respectively. December 31, 2019 2018 Loan Trailing Fee Liability Discount rate 15.0 % — 25.0 % 15.0 % — 25.0 % Default rate 1.7 % — 18.8 % 1.6 % — 16.7 % Prepayment rate 16.5 % — 28.1 % 15.5 % — 25.1 % | |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table presents additional information about Level 3 Loans Held for Sale, Borrower Loans, and Notes measured at fair value on a recurring basis for the year ended December 31, 2019 and 2018 (in thousands): Assets Liabilities Loans Held for Sale Borrower Loans Notes Total Fair Value at January 1, 2018 $ 49 $ 293,005 $ (293,948) $ (894) Additions - Purchases, Issuances 2,365,431 177,101 (176,830) 2,365,702 Principal repayments (43,169) (171,427) 175,760 (38,836) Borrower Loans sold to third parties (2,135,329) (3,690) — (2,139,019) Other changes 1,422 (202) 441 1,661 Change in fair value (4,616) (31,265) 30,574 (5,307) Fair Value at December 31, 2018 183,788 263,522 (264,003) 183,307 Additions - Purchases, Issuances 2,320,560 561,711 (171,138) 2,711,133 Transfers in (Transfers out) (178,924) 178,924 — — Principal repayments (68,857) (313,909) 167,419 (215,347) Borrower Loans sold to third parties (2,108,231) (5,417) — (2,113,648) Other changes 584 33 739 1,356 Change in fair value (6,894) (50,845) 22,812 (34,927) Fair Value at December 31, 2019 $ 142,026 $ 634,019 $ (244,171) $ 531,874 The following table presents additional information about Level 3 Loans Held for Sale, Borrower Loans, and Notes measured at fair value on a recurring basis for the year ended December 31, 2019 and 2018 (in thousands): Assets Liabilities Loans Held for Sale Borrower Loans Notes Total Fair value at January 1, 2018 $ 49 $ 293,005 $ (293,948) $ (894) Originations 2,365,431 177,101 (176,830) 2,365,702 Principal repayments (20) (171,427) 175,760 4,313 Borrower Loans sold to third parties (2,365,450) (3,690) — (2,369,140) Other changes — (202) 441 239 Change in fair value (10) (31,265) 30,574 (701) Fair value at December 31, 2018 $ — $ 263,522 (264,003) $ (481) Originations 2,320,560 170,326 (171,138) 2,319,748 Principal repayments — (162,082) 167,420 5,338 Borrower Loans sold to third parties (2,320,560) (3,399) — (2,323,959) Other changes — (45) 739 694 Change in fair value — (23,185) 22,811 (374) Fair value at December 31, 2019 $ — $ 245,137 $ (244,171) $ 966 | |
Schedule of Servicing Assets and Liabilities Measured at Fair Value | The following table presents additional information about Level 3 Servicing Assets measured at fair value on a recurring basis for the year ended December 31, 2019 and 2018 (in thousands): Servicing Assets Fair Value at January 1, 2018 $ 14,711 Additions 13,171 Loss in fair value (13,195) Fair Value at December 31, 2018 $ 14,687 Additions 11,925 Derecognition (1,522) Loss in fair value (12,488) Fair Value at Fair Value at December 31, 2019 $ 12,602 The following table presents additional information about Level 3 Servicing Assets measured at fair value on a recurring basis for the year ended December 31, 2019 and 2018 (in thousands): Servicing Assets Fair value at January 1, 2018 $ 14,598 Additions 14,315 Loss in fair value (13,363) Fair value at December 31, 2018 $ 15,550 Additions 13,032 Loss in fair value (13,694) Fair value at December 31, 2019 $ 14,888 | |
Level 3 Liabilities Measured on Recurring Basis | The following tables present additional information about Level 3 Convertible Preferred Stock Warrant Liability measured at fair value on a recurring basis for the year ended December 31, 2019 and 2018 (in thousands): Convertible Preferred Stock Warrant Liability Fair Value at January 1, 2018 $ 116,366 Issuance of Stock Warrants 72,316 Change in fair value (45,003) Fair Value at December 31, 2018 $ 143,679 Issuance of Stock Warrants 17,552 Change in fair value (11,235) Fair Value at December 31, 2019 $ 149,996 Loan Trailing Fee The fair value of the Loan Trailing Fee represents the present value of the expected monthly Loan Trailing Fee payments, which takes into consideration certain assumptions related to expected prepayment rates and default rates using a discounted cash flow model. The following table presents additional information about level 3 Loan Trailing Fee Liability measured at fair value on a recurring basis (in thousands): Loan Trailing Fee Liability Balance as of January 1, 2018 $ 2,595 Issuances 2,524 Cash payment of Loan Trailing Fee (2,494) Change in fair value 493 Balance at December 31, 2018 $ 3,118 Issuances 2,254 Cash payment of Loan Trailing Fee (2,660) Change in fair value 285 Balance at December 31, 2019 $ 2,997 | |
Schedule of Certificates Issued by Securitization Trust Measured at Fair Value | The following tables present additional information about Level 3 Certificates Issued by Securitization Trust measured at fair value on a recurring basis for the year ended December 31, 2019 and 2018 (in thousands): Certificates Issued by Securitization Trust Fair Value at December 31, 2018 — Additions - Purchases, Issuances 72,917 Principal repayments (13,770) Borrower Loans sold to third parties — Other changes 642 Change in fair value (7,621) Fair Value at December 31, 2019 $ 52,168 | |
Fair Value Assumptions | Key economic assumptions are used to compute the fair value of Borrower Loans and Loans Held for Sale, Notes and Certificates Issued by Securitization Trust that are presented in the table below. The sensitivity of the current fair value to immediate changes in assumptions at December 31, 2019 for Borrower Loans combined with Loans Held for Sale and for Notes funded through the Note Channel are presented in the following table (in thousands, except percentages): Borrower Loans and Notes Fair value at December 31, 2019, using the following assumptions: $ 776,045 $ 244,171 Weighted-average discount rate 7.00 % 6.43 % Weighted-average default rate 12.63 % 13.68 % Fair value resulting from: 100 basis point increase in discount rate $ 768,924 $ 241,927 200 basis point increase in discount rate $ 761,971 $ 239,737 Fair value resulting from: 100 basis point decrease in discount rate $ 783,344 $ 246,471 200 basis point decrease in discount rate $ 790,823 $ 248,828 Fair value resulting from: 100 basis point increase in default rate $ 765,894 $ 240,958 200 basis point increase in default rate $ 756,007 $ 237,831 Fair value resulting from: 100 basis point decrease in default rate $ 786,541 $ 247,489 200 basis point decrease in default rate $ 797,065 $ 250,817 The sensitivity of the current fair value to immediate changes in assumptions at December 31, 2019 for Certificates Issued by Securitization Trust is presented in the following table (in thousands, except percentages): Certificates Issued by Securitization Trust Fair value at December 31, 2019, using the following assumptions: $ 52,168 Weighted-average discount rate 9.59 % Weighted-average default rate 10.12 % Weighted-average prepayment rate 21.41 % Fair value resulting from: 100 basis point increase in discount rate $ 51,813 200 basis point increase in discount rate $ 51,466 Fair value resulting from: 100 basis point decrease in discount rate $ 52,533 200 basis point decrease in discount rate $ 52,909 Fair value resulting from: 100 basis point increase in default rate $ 48,986 200 basis point increase in default rate $ 45,926 Fair value resulting from: 100 basis point decrease in default rate $ 55,369 200 basis point decrease in default rate $ 58,613 Fair value resulting from: 100 basis point increase in prepayment rate $ 52,085 200 basis point increase in prepayment rate 52,008 Fair value resulting from: 100 basis point decrease in prepayment rate $ 52,253 200 basis point decrease in prepayment rate $ 52,340 Key economic assumptions are used to compute the fair value of Servicing Assets and are presented in the table below. The sensitivity of the current fair value to immediate changes in assumptions at December 31, 2019 for Servicing Assets is presented in the following table (in thousands, except percentages): Servicing Assets Fair value at December 31, 2019, using the following assumptions: $ 12,602 Market servicing rate 0.625 % Weighted-average prepayment rate 20.99 % Weighted-average default rate 12.67 % Fair value resulting from: Market servicing rate increase to 0.65% $ 11,825 Market servicing rate decrease to 0.60% $ 13,387 Fair value resulting from: Applying a 1.1 multiplier to prepayment rate $ 12,348 Applying a 0.9 multiplier to prepayment rate $ 12,868 Fair value resulting from: Applying a 1.1 multiplier to default rate $ 12,377 Applying a 0.9 multiplier to default rate $ 12,840 | |
Financial Instruments, Assets And Liabilities Not Recorded at Fair Value | The following tables present the fair value hierarchy for assets and liabilities not recorded at fair value (in thousands): December 31, 2019 Carrying Amount Level 1 Inputs Level 2 Inputs Level 3 Inputs Fair Value Assets Cash and Cash Equivalents $ 64,635 $ 64,635 $ — $ — $ 64,635 Restricted Cash 155,773 — 155,773 — 155,773 Accounts Receivable 1,695 — 1,695 — 1,695 222,103 64,635 157,468 — 222,103 Liabilities Accounts Payable and Accrued Liabilities $ 19,937 — 19,937 — $ 19,937 Payable to Investors 101,092 — 101,092 — 101,092 Notes Issued by Securitization Trust 347,662 — 353,028 — 353,028 Warehouse Lines 131,583 — 131,090 — 131,090 $ 600,274 $ — $ 605,147 $ — $ 605,147 December 31, 2018 Carrying Amount Level 1 Inputs Level 2 Inputs Level 3 Inputs Fair Value Assets Cash and Cash Equivalents $ 57,945 57,945 — — $ 57,945 Restricted Cash 149,114 — 149,114 — 149,114 Accounts Receivable 5,119 — 5,119 — 5,119 212,178 57,945 154,233 — 212,178 Liabilities Accounts Payable and Accrued Liabilities $ 19,967 — 19,967 — $ 19,967 Payable to Investors 127,538 — 127,538 — 127,538 Warehouse Lines 162,488 — 162,488 — 162,488 $ 309,993 — 309,993 — $ 309,993 | |
Prosper Funding LLC | ||
Entity Information [Line Items] | ||
Fair Value Hierarchy for Assets and Liabilities Measured at Fair Value | The following tables present the fair value hierarchy for assets and liabilities measured at fair value (in thousands): December 31, 2019 Level 1 Inputs Level 2 Inputs Level 3 Inputs Fair Value Assets Borrower Loans $ — $ — $ 245,137 $ 245,137 Servicing Assets — — 14,888 14,888 — — 260,025 260,025 Liabilities Notes $ — $ — $ 244,171 $ 244,171 Servicing Liabilities — — — — Loan Trailing Fee Liability — — 2,997 2,997 $ — $ — $ 247,168 $ 247,168 December 31, 2018 Level 1 Inputs Level 2 Inputs Level 3 Inputs Fair Value Assets Borrower Loans $ — $ — $ 263,522 $ 263,522 Servicing Assets — — 15,550 15,550 — — 279,072 279,072 Liabilities Notes $ — $ — $ 264,003 $ 264,003 Servicing Liabilities — — 12 12 Loan Trailing Fee Liability — — 3,118 3,118 $ — $ — $ 267,133 $ 267,133 | |
Schedule of Servicing Assets and Liabilities Measured at Fair Value | Servicing Assets Fair value at January 1, 2018 $ 14,598 Additions 14,315 Loss in fair value (13,363) Fair value at December 31, 2018 $ 15,550 Additions 13,032 Loss in fair value (13,694) Fair value at December 31, 2019 $ 14,888 | |
Level 3 Liabilities Measured on Recurring Basis | The following tables present additional information about Level 3 Loan Trailing Fee Liability measured at fair value on a recurring basis for the year ended December 31, 2019 and 2018 (in thousands): Loan Trailing Fee Liability Fair Value at January 1, 2018 $ 2,595 Issuances 2,524 Cash payment of Loan Trailing Fee (2,494) Loss in fair value 493 Fair Value at December 31, 2018 $ 3,118 Issuances 2,254 Cash payment of Loan Trailing Fee (2,660) Loss in fair value 285 Fair Value at December 31, 2019 $ 2,997 | |
Fair Value Assumptions | Key economic assumptions are used to compute the fair value of Borrower Loans and Notes. The sensitivity of the current fair value to immediate changes in assumptions at December 31, 2019 for Borrower Loans and Notes funded through the Note Channel are presented in the following table (in thousands, except percentages): Borrower Loans Notes Fair Value at December 31, 2019 $ 245,137 $ 244,171 Weighted-average discount rate 6.43 % 6.43 % Weighted-average default rate 13.68 % 13.68 % Fair value resulting from: 100 basis point increase in discount rate $ 242,888 $ 241,927 200 basis point increase in discount rate 240,691 239,737 Fair value resulting from: 100 basis point decrease in discount rate $ 247,442 $ 246,471 200 basis point decrease in discount rate 249,805 248,828 Fair value resulting from: 100 basis point increase in default rate $ 241,930 $ 240,958 200 basis point increase in default rate 238,807 237,831 Fair value resulting from: 100 basis point decrease in default rate $ 248,453 $ 247,489 200 basis point decrease in default rate 251,777 250,817 Key economic assumptions are used to compute the fair value of Servicing Assets. The sensitivity of the current fair value to immediate changes in assumptions at December 31, 2019 for Servicing Assets is presented in the following table (in thousands, except percentages): Servicing Assets Fair Value at December 31, 2019 $ 14,888 Market servicing rate 0.625 % Weighted-average prepayment rate 20.99 % Weighted-average default rate 12.67 % Fair value resulting from: Market servicing rate increase to 0.65% 13,966 Market servicing rate decrease to 0.60% 15,811 Fair value resulting from: Applying a 1.1 multiplier to prepayment rate 14,583 Applying a 0.9 multiplier to prepayment rate 15,197 Fair value resulting from: Applying a 1.1 multiplier to default rate 14,618 Applying a 0.9 multiplier to default rate 15,165 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Other Intangible Assets for the Periods Presented | The following table presents the detail of other Intangible Assets subject to amortization for the periods presented (dollars in thousands): Gross Carrying Value Accumulated Amortization Net Carrying Value Remaining Useful Life (In Years) December 31, 2019 Developed technology $ 3,060 $ (3,060) $ — $ — User base and customer relationships 5,050 (4,330) 720 5.3 Brand name 60 (60) — — $ 8,170 $ (7,450) $ 720 Gross Carrying Value Accumulated Amortization Net Carrying Value Remaining Useful Life (In Years) December 31, 2018 Developed technology $ 3,060 $ (3,060) $ — — User base and customer relationships 5,050 (4,051) 999 6.3 Brand name 60 (60) — — $ 8,170 $ (7,171) $ 999 |
Summary of Estimated Amortization of Purchased Intangible Assets | Estimated amortization of purchased Intangible Assets for future periods is as follows (in thousands): Years Ending December 31, 2020 $ 220 2021 172 2022 136 2023 107 2024 85 $ 720 |
Other Liabilities (Tables)
Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other Liabilities [Abstract] | |
Schedule of Other Liabilities | Other Liabilities consist of the following (in thousands): December 31, 2019 2018 Loan trailing fee liability $ 2,997 $ 3,118 Deferred revenue 241 396 Loan servicing liabilities — 12 Deferred income tax liability 405 373 Deferred rent — 3,408 Operating lease liabilities 17,507 — Restructuring liability — 2,106 Other 576 1,216 Total Other Liabilities $ 21,726 $ 10,629 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Net Loss Per Share | Basic and diluted Net Loss Per Share was calculated as follows (in thousands, except share and per share amounts): December 31, 2019 2018 2017 Numerator: Net Loss $ (13,711) $ (39,945) $ (115,158) Plus: Return from shareholders on share repurchase 1,066 — — Net income (loss) available to common stockholders $ (12,645) $ (39,945) $ (115,158) Denominator: Weighted average shares used in computing basic and diluted Net Loss Per Share 70,511,605 70,384,501 69,687,836 Net Loss Per Share - basic and diluted $(0.18) $(0.57) $(1.65) |
Dilutive Shares Excluded from the Diluted Net Loss Per Share Calculation | The following Common Stock equivalents were excluded from the computation of diluted Net Loss Per Share for the periods presented because including them would have been anti-dilutive (number of shares): December 31, 2019 2018 2017 Excluded Securities Convertible Preferred Stock issued and outstanding 209,613,570 214,637,925 214,637,925 Stock options issued and outstanding 73,851,862 69,023,373 46,722,408 Unvested stock options exercised — — 11,565 Warrants issued and outstanding 1,080,349 1,081,630 1,166,145 Series E-1 Convertible Preferred Stock warrants 35,544,141 35,544,141 35,544,141 Series F Convertible Preferred Stock warrants 177,720,704 177,720,704 177,720,704 497,810,626 498,007,773 475,802,888 |
Convertible Preferred Stock, _2
Convertible Preferred Stock, Warrant Liability and Stockholders’ Deficit (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Class of Stock [Line Items] | |
Summary of Shares Authorized, Issued, Outstanding, Par Value and Liquidation Preference of Convertible Preferred Stock | The number of authorized, issued and outstanding shares, their par value and liquidation preference for each series of Convertible Preferred Stock as of December 31, 2019 are disclosed in the table below (amounts in thousands, except share and per share amounts): Par Value Authorized Shares Issued and Outstanding Shares Liquidation Preference (Outstanding Shares) Series A $ 0.01 68,558,220 66,428,185 $ 19,160 Series A-1 $ 0.01 24,760,915 22,515,315 45,031 Series B $ 0.01 35,775,880 35,127,160 21,190 Series C $ 0.01 24,404,770 24,404,770 70,075 Series D $ 0.01 23,888,640 23,888,640 165,000 Series E-1 $ 0.01 35,544,141 — — Series E-2 $ 0.01 16,858,078 — — Series F $ 0.01 177,720,707 3 — Series G $ 0.01 37,249,497 37,249,497 50,000 444,760,848 209,613,570 $ 370,456 |
Schedule of Stockholders' Equity Note, Warrants or Rights | The combined activity of the Convertible Preferred Stock Warrant Liability for the years ended December 31, 2019 and December 31, 2018 is as follows (in thousands): Balance at January 1, 2018 116,366 Warrants vested 72,316 Gain recognized (45,003) Balance at January 1, 2019 $ 143,679 Warrants Vested 17,552 Gain recognized (11,235) Balance at December 31, 2019 $ 149,996 |
Series E-1 | |
Class of Stock [Line Items] | |
Schedule of Assumptions Used | The Company determined the fair value of the outstanding convertible Series E-1 preferred stock warrants utilizing the following assumptions as of December 31, 2019 and 2018: December 31, 2019 2018 Volatility 46.0% 40.0% Risk-free interest rate 1.60% 2.62% Expected term (in years) 2.75 3.00 Dividend yield 0% 0% |
Series F Convertible Preferred Stock warrants | |
Class of Stock [Line Items] | |
Schedule of Assumptions Used | The Company determined the fair value of the outstanding Series F Warrants utilizing the following assumptions as of December 31, 2019 and 2018: December 31, 2019 2018 Volatility 46.0% 40.0% Risk-free interest rate 1.60% 2.63% Expected term (in years) 2.75 3.00 Dividend yield 0% 0% |
Shared Based Compensation (Tabl
Shared Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Summarized Option Activity under Option Plan | Stock option activity under the Stock Plans is summarized for the year ended December 31, 2019 as follows: Options Issued and Outstanding Weighted- Average Exercise Price Weighted-Average Contractual Term (in years) Aggregate intrinsic value (1) (in thousands) Balance as of January 1, 2019 71,021,698 $ 0.33 8.20 Options granted 14,792,348 $ 0.24 Options exercised (173,356) $ 0.15 Options forfeited (9,350,233) $ 0.38 Option expirations (53,700) $ 0.30 Balance as of December 31, 2019 76,236,757 $ 0.31 7.41 $ 169 Options vested and expected to vest as of December 31, 2019 62,647,818 $ 0.31 7.41 $ 139 Options vested and exercisable at December 31, 2019 50,693,384 $ 0.28 6.68 $ 169 (1) Aggregate intrinsic value represents the excess of the fair value of our Common Stock as of December 31, 2019 over the exercise price of the outstanding in-the-money options. |
Weighted Average Grant Date Fair Value of Options Granted | Additional information pertaining to PMI's Common Stock option activities is as follows (in thousands, except per share data): Year ended December 31, 2019 2018 2017 Weighted-average grant date fair value of options granted (per share) $ 0.11 $ 0.52 $ 0.28 |
Fair Value of Stock Option Awards | The fair value of PMI’s stock option awards granted during the years ended December 31, 2019, 2018 and 2017 was estimated at the date of grant using the Black-Scholes model with the following weighted average assumptions: December 31, 2019 2018 2017 Volatility of Common Stock 46.70 % 44.04 % 49.24 % Risk-free interest rate 1.95 % 2.78 % 2.12 % Expected life 6.0 years 6.0 years 6.0 years Dividend yield 0 % 0 % 0 % |
Stock Based Compensation Included in Consolidated Statements of Operations | The following table presents the amount of share based compensation related to awards granted to employees recognized in Prosper’s Consolidated Statements of Operations (in thousands): Years Ended December 31, 2019 2018 2017 Origination and Servicing $ 417 $ 911 $ 996 Sales and Marketing 243 451 553 General and Administrative 3,868 7,039 10,689 $ 4,528 $ 8,401 $ 12,238 |
Restructuring (Tables)
Restructuring (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Reserve by Type of Cost | The following table summarizes the activities related to Prosper's restructuring plan (in thousands): Facilities Related Balance as of January 1, 2018 $ 3,244 Adjustments to expense 1,486 Sublease cash receipts 370 Less: Cash paid (3,126) Balance as of December 31, 2018 $ 1,974 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Components of Income Tax | The components of income tax are as follows (in thousands): Years Ended December 31, 2019 2018 2017 Current: Federal $ — $ — $ — State — — — Foreign — 24 — Total Current Income Tax (Benefit) Expense — 24 — Deferred: Federal 47 47 (579) State 52 33 37 Foreign 1 68 34 Total Deferred Income Tax Expense (Benefit) 100 148 (508) Total Income Tax Expense (Benefit) $ 100 $ 172 $ (508) |
Effective Income Tax Reconciliation | The Income Tax Expense (benefit) differed from the amount computed by applying the U.S. federal income tax rate of 21% to pretax loss as a result of the following: Years Ended December 31, 2019 2018 2017 Federal tax at statutory rate 21 % 21 % 34 % State tax at statutory rate (net of federal benefit) 9 % 8 % 7 % Change in U.S. Tax Rate Applied to Deferred Taxes — % — % (31) % Incentive Stock Options (4) % (3) % (1) % Preferred Stock Warrants 8 % 5 % (21) % Change in valuation allowance (33) % (32) % 11 % Other (1) % 1 % 1 % — % — % — % |
Deferred Tax Assets and Liabilities | Temporary items that give rise to significant portions of deferred tax assets and liabilities are as follows (in thousands): December 31, 2019 2018 Net operating loss carry forwards $ 87,834 $ 82,510 Research & other credits 602 668 Fixed assets 42 463 Stock compensation 10,261 9,237 Accrued liabilities 1,858 3,256 Restructuring liability — 615 Other — 4 Lease Obligation 5,182 — Deferred tax assets 105,779 96,753 Fair value of loans — (248) Net servicing rights (2,843) (3,375) Intangible assets (1,067) (721) Foreign Earnings (69) (68) Right of Use Asset (3,816) — Deferred tax liabilities (7,795) (4,412) Net deferred tax asset 97,984 92,341 Valuation allowance (98,458) (92,714) Net deferred tax liability $ (474) $ (373) |
Unrecognized Tax Benefits | The following table summarizes Prosper’s activity related to its unrecognized tax benefits (in thousands): Balance as of January 1, 2018 $ 112 Decrease related to 2018 tax year position — Balance as of December 31, 2018 $ 112 Decrease related to 2019 tax year position tax year position — Balance as of December 31, 2019 $ 112 |
Consortium Purchase Agreement (
Consortium Purchase Agreement (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Consortium Purchase Agreement | The following represents the loans purchased and warrants vested under the Consortium Purchase Agreement (dollars in thousands): Loans Acquired Warrants Vested Balance January 1, 2018 $ 1,826,527 75,186,002 Loans purchased by the consortium during the year ended December 31, 2018 1,240,805 79,726,978 Balance as of December 31, 2018 3,067,332 154,912,980 Loans purchased by the consortium during the year ended December 31, 2019 235,951 22,807,726 Balance December 31, 2019 $ 3,303,283 177,720,706 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Right-of-use Assets | The following represents the operating lease right-of-use (“ROU”) assets as of December 31, 2019 , which are included in "Property and Equipment, Net" on the Consolidated Balance Sheets . December 31, 2019 Gross Carrying Value Accumulated Amortization Net Carrying Value ROU assets - office buildings $ 15,921 $ 3,262 $ 12,659 ROU assets - other 292 232 60 $ 16,213 $ 3,494 $ 12,719 |
Maturity of Lease Liabilities | The table below presents the present value of Prosper's future minimum rental payments for the remaining terms of the operating leases (in thousands): December 31, 2019 2020 $ 5,236 2021 5,130 2022 5,014 2023 1,562 2024 871 Thereafter 1,820 Total future minimum lease payments 19,633 Less: Imputed interest (2,126) Present value of future minimum lease payments $ 17,507 |
Future Minimum Lease Payments | The table below presents future minimum rental payments at December 31, 2018, net of minimum sublease rentals of $5.3 million, for the remaining terms of the operating leases (in thousands): December 31, 2018 2019 $ 4,536 2020 4,683 2021 4,456 2022 4,319 2023 847 Thereafter 387 Total future operating lease obligations $ 19,228 |
Value Used In Determining Present Value of Leases | Values used to determine present value of leases is as follows (dollars in thousands): December 31, 2019 Cash paid for operating leases year-to-date $ 5,228 Right of use assets obtained in exchange for new operating lease obligations (1) $ 21,706 Weighted average remaining lease term 4.16 years Weighted average discount rate 5.54 % (1) Consists of $21.7 million for operating leases existing on January 1, 2019. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future Minimum Lease Payments | The table below presents future minimum rental payments at December 31, 2018, net of minimum sublease rentals of $5.3 million, for the remaining terms of the operating leases (in thousands): December 31, 2018 2019 $ 4,536 2020 4,683 2021 4,456 2022 4,319 2023 847 Thereafter 387 Total future operating lease obligations $ 19,228 |
Related Parties (Tables)
Related Parties (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Entity Information [Line Items] | |
Aggregate Amount of Notes Purchased and the Income Earned | The aggregate amount of the Notes purchased and the income earned by parties deemed to be affiliates and related parties of Prosper as of are summarized below (in thousands): Aggregate Purchases Interest Earned 2019 2018 2019 2018 Executive officers and management $ 23 $ 29 $ 5 $ 2 Directors 464 421 56 45 $ 487 $ 450 $ 61 $ 47 The balance of Notes held by officers, directors who are not executive officers and certain affiliates are as follows (in thousands): December 31, 2019 2018 Executive officers and management $ 35 $ 32 Directors 682 569 $ 717 $ 601 |
Prosper Funding LLC | |
Entity Information [Line Items] | |
Aggregate Amount of Notes Purchased and the Income Earned | The aggregate amount of the notes and Borrower Loans purchased and the income earned by parties deemed to be related parties of Prosper Funding as of December 31, 2019 and 2018 are summarized below (in thousands): Aggregate Purchases Interest Earned 2019 2018 2019 2018 Executive officers and management $ 23 $ 29 $ 5 $ 2 Directors — — — — $ 23 $ 29 $ 5 $ 2 The balance of Notes held by officers and directors who are not executives officers are as follows (in thousands): December 31, 2019 2018 Executive officers and management $ 35 $ 32 Directors — — $ 35 $ 32 |
Organization and Business (Deta
Organization and Business (Details) - state | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||
Percentage of notes allowed for investors to purchase | 100.00% | |
Number of states and district marketplace is open to investors | 30 | |
Additional number of states and district marketplace is open to borrowers | 48 | |
Prosper Funding LLC | ||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||
Percentage of notes allowed for investors to purchase | 100.00% | |
Number of states and district marketplace is open to investors | 30 | |
Additional number of states and district marketplace is open to borrowers | 48 | |
Minimum | Prosper Funding LLC | ||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||
Term | 3 years |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2019 | |
Entity Information [Line Items] | ||||
Servicing fee, percent | 1.00% | |||
Impairment charges recognized during period | $ 0 | $ 0 | ||
Advertising costs | 32,800,000 | 48,000,000 | $ 66,900,000 | |
Gross Carrying Value | 12,719,000 | |||
Operating lease liabilities | 17,507,000 | |||
Other Liabilities | $ 21,726,000 | 10,629,000 | ||
Prosper Funding LLC | ||||
Entity Information [Line Items] | ||||
Servicing fee, percent | 1.00% | |||
Other Liabilities | $ 3,727,000 | $ 4,528,000 | ||
Minimum | ||||
Entity Information [Line Items] | ||||
Transaction fee percentage | 1.00% | |||
Maximum | ||||
Entity Information [Line Items] | ||||
Transaction fee percentage | 5.00% | |||
User base and customer relationships | Minimum | ||||
Entity Information [Line Items] | ||||
Intangible assets amortized period | 3 years | 3 years | ||
User base and customer relationships | Maximum | ||||
Entity Information [Line Items] | ||||
Intangible assets amortized period | 10 years | |||
Developed technology | Minimum | ||||
Entity Information [Line Items] | ||||
Intangible assets amortized period | 3 years | 3 years | ||
Developed technology | Maximum | ||||
Entity Information [Line Items] | ||||
Intangible assets amortized period | 5 years | |||
Brand name | ||||
Entity Information [Line Items] | ||||
Intangible assets amortized period | 1 year | |||
Borrower Loans | ||||
Entity Information [Line Items] | ||||
Servicing fee, percent | 1.075% | |||
Accounting Standards Update 2016-02 | ||||
Entity Information [Line Items] | ||||
Gross Carrying Value | $ 16,200,000 | |||
Operating lease liabilities | 21,700,000 | |||
Other Liabilities | $ (5,500,000) |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Estimated Useful Lives of Assets (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, estimated useful life | 7 years | |
Office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, estimated useful life | 5 years | |
Computers and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, estimated useful life | 3 years | |
Leasehold improvements | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, estimated useful life | 5 years | |
Leasehold improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, estimated useful life | 8 years | |
Internal-use software and website development costs | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, estimated useful life | 1 year | |
Internal-use software and website development costs | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, estimated useful life | 5 years | |
Prosper Funding LLC | Internal-use software and website development costs | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, estimated useful life | 1 year | |
Prosper Funding LLC | Internal-use software and website development costs | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, estimated useful life | 5 years |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Operating lease right-of-use assets | $ 16,213 | |
Property and equipment | $ 50,615 | |
Property and equipment | 71,139 | |
Less: Accumulated depreciation and amortization | (39,843) | |
Less: Accumulated depreciation and amortization | (35,342) | |
Total Property and Equipment, Net | 31,296 | |
Total Property and Equipment, Net | 15,273 | |
Prosper Funding LLC | ||
Property, Plant and Equipment [Line Items] | ||
Less: Accumulated depreciation and amortization | (17,381) | (16,079) |
Total Property and Equipment, Net | 7,549 | 6,426 |
Operating lease right-of-use assets | ||
Property, Plant and Equipment [Line Items] | ||
Operating lease right-of-use assets | 16,213 | |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 13,420 | 15,193 |
Internal-use software and website development costs | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 28,904 | 22,505 |
Internal-use software and website development costs | Prosper Funding LLC | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 24,930 | 22,505 |
Office equipment and furniture | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 2,999 | 3,015 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 7,158 | 7,157 |
Assets not yet placed in service | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 2,445 | $ 2,745 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation and Amortization | $ 7,676 | $ 9,968 | $ 12,348 |
Prosper Funding LLC | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation and Amortization | 4,397 | 5,664 | 5,853 |
Property and Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation and Amortization | 7,400 | 9,600 | 11,000 |
Internal-use software and website development costs | |||
Property, Plant and Equipment [Line Items] | |||
Capitalized internal-use software and website development costs | 9,300 | 5,700 | 3,700 |
Internal-use software and website development costs | Prosper Funding LLC | |||
Property, Plant and Equipment [Line Items] | |||
Capitalized internal-use software and website development costs | $ 5,500 | $ 4,100 | $ 3,700 |
Borrower Loans and Notes, at _3
Borrower Loans and Notes, at Fair Value - Fair Value of Borrower Loans and Notes (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Borrower Loans | $ 634,019 | [1] | $ 263,522 | |
Loans Held for Sale | [1] | 142,026 | 183,788 | |
Notes at Fair Value | (244,171) | (264,003) | ||
Prosper Funding LLC | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Borrower Loans | 245,137 | 263,522 | ||
Notes at Fair Value | (244,171) | (264,003) | ||
Notes | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Aggregate principal balance outstanding | (250,281) | (272,430) | ||
Fair value adjustments | (6,110) | (8,427) | ||
Notes at Fair Value | (244,171) | (264,003) | ||
Notes | Prosper Funding LLC | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Aggregate principal balance outstanding | (250,281) | (272,430) | ||
Fair value adjustments | (6,110) | (8,427) | ||
Notes at Fair Value | (244,171) | (264,003) | ||
Borrower Loans | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Aggregate principal balance outstanding | 647,209 | 269,093 | ||
Fair value adjustments | (13,190) | (5,571) | ||
Borrower Loans | 634,019 | 263,522 | ||
Borrower Loans | Prosper Funding LLC | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Aggregate principal balance outstanding | 248,702 | 269,093 | ||
Fair value adjustments | (3,565) | (5,571) | ||
Borrower Loans | 245,137 | 263,522 | ||
Loans Held for Sale | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Fair value adjustments | (1,235) | (1,869) | ||
Aggregate principal balance outstanding | 143,261 | 185,657 | ||
Loans Held for Sale | $ 142,026 | $ 183,788 | ||
[1] | (1) Includes amounts in consolidated variable interest entities (VIEs) presented separately in the table below. |
Borrower Loans and Notes, at _4
Borrower Loans and Notes, at Fair Value - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Borrower Loans | $ 634,019 | [1] | $ 263,522 | |
Net interest income | 37,050 | 11,830 | $ 3,254 | |
Prosper Funding LLC | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Borrower Loans | 245,137 | 263,522 | ||
Loss on change in fair value of Borrower Loans | $ (2,900) | $ (800) | ||
Minimum number of days for which loans originated were delinquent | 90 days | 90 days | ||
Fair value of loans originated | $ 800 | $ 1,100 | ||
Borrower Loans receivable | 300 | 300 | ||
Net interest income | 2,654 | 2,913 | $ 3,254 | |
Prosper Funding LLC | Financing Receivables, Equal to Greater than 90 Days Past Due | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Aggregate principal amount of loans originated | $ 2,600 | $ 2,500 | ||
Outstanding Borrower Loans And Underlying Notes | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Fixed interest rate, Minimum | 5.31% | 5.31% | ||
Fixed interest rate, Maximum | 31.92% | 31.92% | ||
Minimum number of days for which loans originated were delinquent | 90 days | 90 days | ||
Aggregate principal amount of loans originated | $ 6,500 | $ 2,500 | ||
Fair value of loans originated | $ 1,900 | 1,100 | ||
Non accrual status past due date | 120 days | |||
Borrower Loans receivable | $ 700 | $ 300 | ||
Outstanding Borrower Loans And Underlying Notes | Prosper Funding LLC | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Fixed interest rate, Minimum | 5.31% | |||
Fixed interest rate, Maximum | 31.92% | |||
Loans Held For Sale Borrower Loans And Underlying Notes | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Fixed interest rate, Minimum | 5.31% | 5.31% | ||
Fixed interest rate, Maximum | 31.82% | 31.82% | ||
Aggregate principal amount of loans originated | $ 700 | $ 800 | ||
Fair value of loans originated | $ 200 | $ 300 | ||
Non accrual status past due date | 120 days | 120 days | ||
Borrower Loans receivable | $ 100 | |||
Minimum number of days for which loans held for sale were delinquent | 90 days | 90 days | ||
Net interest income | $ 19,000 | $ 14,100 | ||
Fair value adjustments | $ (1,200) | $ (1,900) | ||
Loans Held For Sale Borrower Loans And Underlying Notes | Prosper Funding LLC | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Fixed interest rate, Minimum | 5.31% | |||
Fixed interest rate, Maximum | 31.92% | |||
Minimum | Outstanding Borrower Loans And Underlying Notes | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Original term | 36 months | 36 months | ||
Minimum | Loans Held For Sale Borrower Loans And Underlying Notes | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Original term | 36 months | 36 months | ||
Minimum | Loans Held For Sale Borrower Loans And Underlying Notes | Prosper Funding LLC | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Original term | 36 months | 36 months | ||
Maximum | Outstanding Borrower Loans And Underlying Notes | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Original term | 60 months | 60 months | ||
Maximum | Loans Held For Sale Borrower Loans And Underlying Notes | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Original term | 60 months | 60 months | ||
Maximum | Loans Held For Sale Borrower Loans And Underlying Notes | Prosper Funding LLC | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Original term | 60 months | 60 months | ||
[1] | (1) Includes amounts in consolidated variable interest entities (VIEs) presented separately in the table below. |
Loan Servicing Assets and Lia_2
Loan Servicing Assets and Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Gain on sale of borrower loans | $ 10,946 | $ 13,147 | $ 11,431 |
Loss from fair value warrants | (17,553) | (72,316) | (60,122) |
Prosper Funding LLC | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Gain on sale of borrower loans | (5,058) | (58,027) | (48,691) |
Borrower Loans | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Outstanding principal | $ 3,100,000 | $ 3,600,000 | |
Fixed interest rate, Minimum | 5.31% | 5.31% | |
Fixed interest rate, Maximum | 31.92% | 35.52% | |
Contractually specified servicing fees, late charges and ancillary fees | $ 38,400 | $ 43,100 | 39,000 |
Borrower Loans | Minimum | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Original term | 36 months | 36 months | |
Borrower Loans | Maximum | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Original term | 60 months | 60 months | |
Borrower Loans | Prosper Funding LLC | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Gain on sale of borrower loans | $ (5,100) | $ (58,000) | (48,700) |
Outstanding principal | $ 3,700,000 | $ 3,700,000 | |
Fixed interest rate, Minimum | 5.31% | 5.31% | |
Fixed interest rate, Maximum | 31.92% | 35.52% | |
Contractually specified servicing fees, late charges and ancillary fees | $ 43,400 | $ 44,000 | $ 38,500 |
Borrower Loans | Prosper Funding LLC | Minimum | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Original term | 36 months | ||
Borrower Loans | Prosper Funding LLC | Maximum | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Original term | 60 months |
Available for Sale Investment_3
Available for Sale Investments, at Fair Value - Schedule of Amortized Cost (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Schedule Of Available For Sale Securities [Line Items] | ||
Fair Value | $ 0 | $ 22,173 |
Fixed Maturities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 22,186 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (13) | |
Fair Value | 22,173 | |
Fixed Maturities | Treasury Bills | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 17,940 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (3) | |
Fair Value | 17,937 | |
Fixed Maturities | US Treasury securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 4,246 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | (10) | |
Fair Value | $ 4,236 |
Securitization - Additional Inf
Securitization - Additional Information (Details) - USD ($) $ in Thousands | May 23, 2019 | Feb. 07, 2019 | Dec. 31, 2019 | Nov. 06, 2019 | Dec. 31, 2018 | ||
Variable Interest Entity [Line Items] | |||||||
Notes issued by securitization trust | [1] | $ 347,662 | $ 0 | ||||
Borrower Loans | 634,019 | [1] | 263,522 | ||||
Risk retention interest and residual certificates held by third party investors at fair value | [1] | 52,168 | 0 | ||||
Variable Interest Entity, Primary Beneficiary | |||||||
Variable Interest Entity [Line Items] | |||||||
Notes issued by securitization trust | [2] | 347,662 | 0 | ||||
Borrower Loans | [2] | 388,882 | 0 | ||||
Risk retention interest and residual certificates held by third party investors at fair value | [2] | 52,168 | $ 0 | ||||
2019 Notes | Variable Interest Entity, Primary Beneficiary | |||||||
Variable Interest Entity [Line Items] | |||||||
Principal balance of securitization | 573,000 | ||||||
2019-1 Notes | Variable Interest Entity, Primary Beneficiary | |||||||
Variable Interest Entity [Line Items] | |||||||
Percent of residual certificates issued by securitization trusts retained | 65.50% | ||||||
Debt issuance costs | $ 2,300 | ||||||
Unamortized debt issuance costs | 94,200 | ||||||
Borrower Loans | 104,200 | ||||||
Risk retention interest and residual certificates held by third party investors at fair value | 9,800 | ||||||
2019-1, Class A Notes | Variable Interest Entity, Primary Beneficiary | |||||||
Variable Interest Entity [Line Items] | |||||||
Notes issued by securitization trust | $ 127,300 | ||||||
Fixed interest rate | 3.54% | ||||||
2019-1, Class B Notes | Variable Interest Entity, Primary Beneficiary | |||||||
Variable Interest Entity [Line Items] | |||||||
Notes issued by securitization trust | $ 25,000 | ||||||
Fixed interest rate | 4.03% | ||||||
2019-1, Class C Notes | Variable Interest Entity, Primary Beneficiary | |||||||
Variable Interest Entity [Line Items] | |||||||
Notes issued by securitization trust | $ 19,300 | ||||||
Fixed interest rate | 5.27% | ||||||
2019-2 Notes | Variable Interest Entity, Primary Beneficiary | |||||||
Variable Interest Entity [Line Items] | |||||||
Percent of residual certificates issued by securitization trusts retained | 16.40% | ||||||
Debt issuance costs | $ 1,900 | ||||||
Unamortized debt issuance costs | 122,000 | ||||||
Borrower Loans | 138,500 | ||||||
Risk retention interest and residual certificates held by third party investors at fair value | $ 21,500 | ||||||
2019-2, Class A Notes | Variable Interest Entity, Primary Beneficiary | |||||||
Variable Interest Entity [Line Items] | |||||||
Notes issued by securitization trust | $ 110,100 | ||||||
Fixed interest rate | 3.20% | ||||||
2019-2, Class B Notes | Variable Interest Entity, Primary Beneficiary | |||||||
Variable Interest Entity [Line Items] | |||||||
Notes issued by securitization trust | $ 31,400 | ||||||
Fixed interest rate | 3.69% | ||||||
2019-2, Class C Notes | Variable Interest Entity, Primary Beneficiary | |||||||
Variable Interest Entity [Line Items] | |||||||
Notes issued by securitization trust | $ 32,700 | ||||||
Fixed interest rate | 5.05% | ||||||
2019-4 Notes | Variable Interest Entity, Primary Beneficiary | |||||||
Variable Interest Entity [Line Items] | |||||||
Percent of residual certificates issued by securitization trusts retained | 19.60% | ||||||
Debt issuance costs | $ 1,200 | ||||||
Unamortized debt issuance costs | $ 131,400 | ||||||
Borrower Loans | 146,100 | ||||||
Risk retention interest and residual certificates held by third party investors at fair value | $ 20,800 | ||||||
2019-4, Class A Notes | Variable Interest Entity, Primary Beneficiary | |||||||
Variable Interest Entity [Line Items] | |||||||
Principal balance of securitization | $ 102,600 | ||||||
Fixed interest rate | 2.48% | ||||||
2019-4, Class B Notes | Variable Interest Entity, Primary Beneficiary | |||||||
Variable Interest Entity [Line Items] | |||||||
Principal balance of securitization | $ 19,500 | ||||||
Fixed interest rate | 3.20% | ||||||
2019-4, Class C Notes | Variable Interest Entity, Primary Beneficiary | |||||||
Variable Interest Entity [Line Items] | |||||||
Principal balance of securitization | $ 16,800 | ||||||
Fixed interest rate | 4.95% | ||||||
[1] | (1) Includes amounts in consolidated variable interest entities (VIEs) presented separately in the table below. | ||||||
[2] | The following table presents the assets and liabilities of consolidated variable interest entities (VIEs), which are included in the Consolidated Balance Sheets above. The assets in the table below may only be used to settle obligations of consolidated VIEs and are in excess of those obligations. Additionally, the assets and liabilities in the table below include third-party assets and liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. See N ote 7 - Securitizations and Note 11 - Debt, to Notes to Consolidated Financial Statements for add itional information. |
Fair Value of Assets and Liab_3
Fair Value of Assets and Liabilities - Fair Value Hierarchy (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Assets: | |||||
Borrower Loans | $ 634,019 | [1] | $ 263,522 | ||
Loans Held for Sale | [1] | 142,026 | 183,788 | ||
Available for Sale Investments | 0 | 22,173 | |||
Servicing Assets | 12,602 | 14,687 | |||
Total Assets | 788,647 | 484,170 | |||
Liabilities: | |||||
Notes | 244,171 | 264,003 | |||
Servicing Liabilities | 0 | 12 | |||
Certificates Issued by Securitization Trust, at Fair value | [1] | 52,168 | 0 | ||
Convertible Preferred Stock Warrant Liability | 149,996 | 143,679 | |||
Loan Trailing Fee Liability | 2,997 | 3,118 | |||
Financial Liabilities Fair Value Disclosure | 449,332 | 410,812 | |||
Prosper Funding LLC | |||||
Assets: | |||||
Borrower Loans | 245,137 | 263,522 | |||
Servicing Assets | 14,888 | 15,550 | |||
Total Assets | 260,025 | 279,072 | |||
Liabilities: | |||||
Notes | 244,171 | 264,003 | |||
Servicing Liabilities | 0 | 12 | |||
Loan Trailing Fee Liability | 2,997 | 3,118 | |||
Financial Liabilities Fair Value Disclosure | 247,168 | 267,133 | |||
Level 1 Inputs | |||||
Assets: | |||||
Borrower Loans | 0 | 0 | |||
Loans Held for Sale | 0 | 0 | |||
Available for Sale Investments | 0 | 0 | |||
Servicing Assets | 0 | 0 | |||
Total Assets | 0 | 0 | |||
Liabilities: | |||||
Notes | 0 | 0 | |||
Servicing Liabilities | 0 | 0 | |||
Certificates Issued by Securitization Trust, at Fair value | 0 | ||||
Convertible Preferred Stock Warrant Liability | 0 | 0 | |||
Loan Trailing Fee Liability | 0 | 0 | |||
Financial Liabilities Fair Value Disclosure | 0 | 0 | |||
Level 1 Inputs | Prosper Funding LLC | |||||
Assets: | |||||
Borrower Loans | 0 | 0 | |||
Servicing Assets | 0 | 0 | |||
Total Assets | 0 | 0 | |||
Liabilities: | |||||
Notes | 0 | 0 | |||
Servicing Liabilities | 0 | 0 | |||
Loan Trailing Fee Liability | 0 | 0 | |||
Financial Liabilities Fair Value Disclosure | 0 | 0 | |||
Level 2 Inputs | |||||
Assets: | |||||
Borrower Loans | 0 | 0 | |||
Loans Held for Sale | 0 | 0 | |||
Available for Sale Investments | 0 | 22,173 | |||
Servicing Assets | 0 | 0 | |||
Total Assets | 0 | 22,173 | |||
Liabilities: | |||||
Notes | 0 | 0 | |||
Servicing Liabilities | 0 | 0 | |||
Certificates Issued by Securitization Trust, at Fair value | 0 | ||||
Convertible Preferred Stock Warrant Liability | 0 | 0 | |||
Loan Trailing Fee Liability | 0 | 0 | |||
Financial Liabilities Fair Value Disclosure | 0 | 0 | |||
Level 2 Inputs | Prosper Funding LLC | |||||
Assets: | |||||
Borrower Loans | 0 | 0 | |||
Servicing Assets | 0 | 0 | |||
Total Assets | 0 | 0 | |||
Liabilities: | |||||
Notes | 0 | 0 | |||
Servicing Liabilities | 0 | 0 | |||
Loan Trailing Fee Liability | 0 | 0 | |||
Financial Liabilities Fair Value Disclosure | 0 | 0 | |||
Level 3 Inputs | |||||
Assets: | |||||
Borrower Loans | 634,019 | 263,522 | |||
Loans Held for Sale | 142,026 | 183,788 | |||
Available for Sale Investments | 0 | 0 | |||
Servicing Assets | 12,602 | 14,687 | $ 14,711 | ||
Total Assets | 788,647 | 461,997 | |||
Liabilities: | |||||
Notes | 244,171 | 264,003 | |||
Servicing Liabilities | 0 | 12 | |||
Certificates Issued by Securitization Trust, at Fair value | 52,168 | ||||
Convertible Preferred Stock Warrant Liability | 149,996 | 143,679 | |||
Loan Trailing Fee Liability | 2,997 | 3,118 | |||
Financial Liabilities Fair Value Disclosure | 449,332 | 410,812 | |||
Level 3 Inputs | Prosper Funding LLC | |||||
Assets: | |||||
Borrower Loans | 263,522 | ||||
Servicing Assets | 14,888 | 15,550 | |||
Total Assets | 260,025 | 279,072 | |||
Liabilities: | |||||
Notes | 244,171 | 264,003 | |||
Servicing Liabilities | 0 | 12 | |||
Loan Trailing Fee Liability | 2,997 | 3,118 | |||
Financial Liabilities Fair Value Disclosure | $ 247,168 | $ 267,133 | |||
[1] | (1) Includes amounts in consolidated variable interest entities (VIEs) presented separately in the table below. |
Fair Value of Assets and Liab_4
Fair Value of Assets and Liabilities - Borrower Loans, Loans Held For Sale and Notes (Details) | Dec. 31, 2019 | Dec. 31, 2018 |
Discount rate | Minimum | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Measurement input | 0.044 | 0.047 |
Discount rate | Minimum | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Measurement input | 0.044 | 0.047 |
Discount rate | Maximum | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Measurement input | 0.122 | 0.138 |
Discount rate | Maximum | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Measurement input | 0.121 | 0.138 |
Default rate | Minimum | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Measurement input | 0.021 | 0.020 |
Default rate | Minimum | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Measurement input | 0.024 | 0.020 |
Default rate | Maximum | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Measurement input | 0.186 | 0.158 |
Default rate | Maximum | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Measurement input | 0.177 | 0.158 |
Fair Value Measures and Disclos
Fair Value Measures and Disclosures - Certificates Issued by Securitzation Trust (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Minimum | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Discount rate | 4.00% |
Default rate | 2.00% |
Prepayment rate | 14.50% |
Maximum | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Discount rate | 15.00% |
Default rate | 17.00% |
Prepayment rate | 33.00% |
Fair Value of Assets and Liab_5
Fair Value of Assets and Liabilities - Servicing Rights (Details) - Prosper Funding LLC | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Servicing Assets And Liabilities Fair Value [Line Items] | ||
Market servicing rate | 0.625% | 0.625% |
Market rate for collection fee | 600.00% | 800.00% |
Weighted average market servicing rate | 6850.00% | 7050.00% |
Minimum | ||
Servicing Assets And Liabilities Fair Value [Line Items] | ||
Discount rate | 15.00% | 15.00% |
Default rate | 1.70% | 1.60% |
Prepayment rate | 16.50% | 15.50% |
Maximum | ||
Servicing Assets And Liabilities Fair Value [Line Items] | ||
Discount rate | 25.00% | 25.00% |
Default rate | 18.80% | 16.70% |
Prepayment rate | 28.10% | 25.10% |
Fair Value of Assets and Liab_6
Fair Value of Assets and Liabilities - Loan Trailing Fee Liability (Details) | Dec. 31, 2019 | Dec. 31, 2018 |
Discount rate | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | 0.044 | 0.047 |
Discount rate | Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | 0.122 | 0.138 |
Discount rate | Prosper Funding LLC | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | 0.044 | 0.047 |
Discount rate | Prosper Funding LLC | Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | 0.121 | 0.138 |
Discount rate | Prosper Funding LLC | Loan trailing fee liability | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | 0.150 | 0.150 |
Discount rate | Prosper Funding LLC | Loan trailing fee liability | Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | 0.250 | 0.250 |
Default rate | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | 0.021 | 0.020 |
Default rate | Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | 0.186 | 0.158 |
Default rate | Prosper Funding LLC | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | 0.024 | 0.020 |
Default rate | Prosper Funding LLC | Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | 0.177 | 0.158 |
Default rate | Prosper Funding LLC | Loan trailing fee liability | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | 0.017 | 0.016 |
Default rate | Prosper Funding LLC | Loan trailing fee liability | Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | 0.188 | 0.167 |
Weighted-average prepayment rate | Prosper Funding LLC | Loan trailing fee liability | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | 0.165 | 0.155 |
Weighted-average prepayment rate | Prosper Funding LLC | Loan trailing fee liability | Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | 0.281 | 0.251 |
Fair Value of Assets and Liab_7
Fair Value of Assets and Liabilities - Summary of Level 3 Borrower Loans, Loans Held for Sale and Notes (Details) - Recurring - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Changes in Level 3 assets measured at fair value on a recurring basis [Abstract] | ||
Beginning balance, Total | $ 183,307 | $ (894) |
Additions - Purchases, Issuances, Total | 2,711,133 | 2,365,702 |
Transfers in (Transfers out), Total | 0 | |
Principal repayments, Total | (215,347) | (38,836) |
Borrower Loans sold to third parties, Total | (2,113,648) | (2,139,019) |
Other changes, Total | 1,356 | 1,661 |
Change in fair value, Total | (34,927) | (5,307) |
Ending balance, Total | 531,874 | 183,307 |
Prosper Funding LLC | ||
Changes in Level 3 assets measured at fair value on a recurring basis [Abstract] | ||
Beginning balance, Total | (481) | (894) |
Additions - Purchases, Issuances, Total | 2,319,748 | 2,365,702 |
Principal repayments, Total | 5,338 | 4,313 |
Borrower Loans sold to third parties, Total | (2,323,959) | (2,369,140) |
Other changes, Total | 694 | 239 |
Change in fair value, Total | (374) | (701) |
Ending balance, Total | 966 | (481) |
Notes | ||
Changes in Level 3 assets measured at fair value on a recurring basis [Abstract] | ||
Beginning balance, Liabilities | (264,003) | (293,948) |
Additions - Purchases, Issuances | (171,138) | (176,830) |
Transfers in (Transfers out), Liabilities | 0 | |
Principal repayments, Liabilities | 167,419 | 175,760 |
Borrower Loans sold to third parties, Liabilities | 0 | 0 |
Other changes, Liabilities | 739 | 441 |
Change in fair value | 22,812 | 30,574 |
Ending balance, Liabilities | (244,171) | (264,003) |
Notes | Prosper Funding LLC | ||
Changes in Level 3 assets measured at fair value on a recurring basis [Abstract] | ||
Beginning balance, Liabilities | (264,003) | (293,948) |
Additions - Purchases, Issuances | (171,138) | (176,830) |
Principal repayments, Liabilities | 167,420 | 175,760 |
Borrower Loans sold to third parties, Liabilities | 0 | 0 |
Other changes, Liabilities | 739 | 441 |
Change in fair value | 22,811 | 30,574 |
Ending balance, Liabilities | (244,171) | (264,003) |
Loans Held for Sale | ||
Changes in Level 3 assets measured at fair value on a recurring basis [Abstract] | ||
Beginning balance, Assets | 183,788 | 49 |
Additions - Purchases, Issuances | 2,320,560 | 2,365,431 |
Transfers in (Transfers out), Assets | (178,924) | |
Principal repayments | (68,857) | (43,169) |
Borrower Loans sold to third parties | (2,108,231) | (2,135,329) |
Other changes, Assets | 584 | 1,422 |
Change in fair value | (6,894) | (4,616) |
Ending balance, Assets | 142,026 | 183,788 |
Loans Held for Sale | Prosper Funding LLC | ||
Changes in Level 3 assets measured at fair value on a recurring basis [Abstract] | ||
Beginning balance, Assets | 0 | 49 |
Additions - Purchases, Issuances | 2,320,560 | 2,365,431 |
Principal repayments | 0 | (20) |
Borrower Loans sold to third parties | (2,320,560) | (2,365,450) |
Other changes, Assets | 0 | 0 |
Change in fair value | 0 | (10) |
Ending balance, Assets | 0 | 0 |
Borrower Loans | ||
Changes in Level 3 assets measured at fair value on a recurring basis [Abstract] | ||
Beginning balance, Assets | 263,522 | 293,005 |
Additions - Purchases, Issuances | 561,711 | 177,101 |
Transfers in (Transfers out), Assets | 178,924 | |
Principal repayments | (313,909) | (171,427) |
Borrower Loans sold to third parties | (5,417) | (3,690) |
Other changes, Assets | 33 | (202) |
Change in fair value | (50,845) | (31,265) |
Ending balance, Assets | 634,019 | 263,522 |
Borrower Loans | Prosper Funding LLC | ||
Changes in Level 3 assets measured at fair value on a recurring basis [Abstract] | ||
Beginning balance, Assets | 263,522 | 293,005 |
Additions - Purchases, Issuances | 170,326 | 177,101 |
Principal repayments | (162,082) | (171,427) |
Borrower Loans sold to third parties | (3,399) | (3,690) |
Other changes, Assets | (45) | (202) |
Change in fair value | $ (23,185) | (31,265) |
Ending balance, Assets | $ 263,522 |
Fair Value of Assets and Liab_8
Fair Value of Assets and Liabilities - Schedule of Servicing Assets and Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Servicing Assets | ||
Beginning balance, fair value | $ 14,687 | |
Ending balance, fair value | 12,602 | $ 14,687 |
Prosper Funding LLC | ||
Servicing Assets | ||
Beginning balance, fair value | 15,550 | |
Ending balance, fair value | 14,888 | 15,550 |
Servicing Assets | ||
Servicing Assets | ||
Additions | 11,925 | 13,171 |
Derecognition | (1,522) | |
Loss in fair value | (12,488) | (13,195) |
Ending balance, fair value | 12,602 | |
Servicing Assets | Prosper Funding LLC | ||
Servicing Assets | ||
Beginning balance, fair value | 15,550 | 14,598 |
Additions | 13,032 | 14,315 |
Loss in fair value | (13,694) | (13,363) |
Ending balance, fair value | $ 14,888 | $ 15,550 |
Fair Value Measures and Discl_2
Fair Value Measures and Disclosures - Schedule of Certificates Issued by Securitization Trust (Details) - Certificates Issued by Securitization Trust $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Additions - Purchases, Issuances | $ 72,917 |
Principal repayments | (13,770) |
Borrower Loans sold to third parties | 0 |
Other changes | 642 |
Change in fair value | (7,621) |
Level 3 Inputs | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Beginning balance, Assets | 0 |
Ending balance, Assets | $ 52,168 |
Fair Value of Assets and Liab_9
Fair Value of Assets and Liabilities - Preferred Stock Warrant and Trailing Fee (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Mandatorily Redeemable Preferred Stock | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance, fair value | $ 143,679 | $ 116,366 |
Issuances | 17,552 | 72,316 |
Change in fair value | (45,003) | |
Ending balance, fair value | 143,679 | |
Trailing Fee | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance, fair value | 3,118 | 2,595 |
Issuances | 2,254 | 2,524 |
Cash payment of Loan Trailing Fee | (2,660) | (2,494) |
Change in fair value | 285 | 493 |
Ending balance, fair value | 2,997 | 3,118 |
Prosper Funding LLC | Trailing Fee | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance, fair value | 3,118 | 2,595 |
Issuances | 2,254 | 2,524 |
Cash payment of Loan Trailing Fee | (2,660) | (2,494) |
Change in fair value | 285 | 493 |
Ending balance, fair value | $ 2,997 | $ 3,118 |
Fair Value of Assets and Lia_10
Fair Value of Assets and Liabilities - Assumptions for Borrower Loans, Loans Held for Sale and Notes (Details) $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes/loans, fair value | $ 244,171 | $ 264,003 |
Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes/loans, fair value | 244,171 | $ 264,003 |
Discount rate assumption | 100 basis point increase | Notes | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes | 241,927 | |
Discount rate assumption | 100 basis point increase | Notes | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes | 241,927 | |
Discount rate assumption | 200 basis point increase | Notes | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes | 239,737 | |
Discount rate assumption | 200 basis point increase | Notes | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes | 239,737 | |
Discount rate assumption | 100 basis point decrease | Notes | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes | 246,471 | |
Discount rate assumption | 100 basis point decrease | Notes | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes | 246,471 | |
Discount rate assumption | 200 basis point decrease | Notes | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes | 248,828 | |
Discount rate assumption | 200 basis point decrease | Notes | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes | 248,828 | |
Default rate assumption | 100 basis point increase | Notes | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes | 240,958 | |
Default rate assumption | 100 basis point increase | Notes | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes | 240,958 | |
Default rate assumption | 200 basis point increase | Notes | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes | 237,831 | |
Default rate assumption | 200 basis point increase | Notes | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes | 237,831 | |
Default rate assumption | 100 basis point decrease | Notes | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes | 247,489 | |
Default rate assumption | 100 basis point decrease | Notes | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes | 247,489 | |
Default rate assumption | 200 basis point decrease | Notes | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes | 250,817 | |
Default rate assumption | 200 basis point decrease | Notes | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes | 250,817 | |
Borrower Loans / Loans Held for Sale | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes/loans, fair value | 776,045 | |
Borrower Loans / Loans Held for Sale | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Notes/loans, fair value | 245,137 | |
Borrower Loans / Loans Held for Sale | Discount rate assumption | 100 basis point increase | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Borrower loans | 768,924 | |
Borrower Loans / Loans Held for Sale | Discount rate assumption | 100 basis point increase | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Borrower loans | 242,888 | |
Borrower Loans / Loans Held for Sale | Discount rate assumption | 200 basis point increase | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Borrower loans | 761,971 | |
Borrower Loans / Loans Held for Sale | Discount rate assumption | 200 basis point increase | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Borrower loans | 240,691 | |
Borrower Loans / Loans Held for Sale | Discount rate assumption | 100 basis point decrease | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Borrower loans | 783,344 | |
Borrower Loans / Loans Held for Sale | Discount rate assumption | 100 basis point decrease | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Borrower loans | 247,442 | |
Borrower Loans / Loans Held for Sale | Discount rate assumption | 200 basis point decrease | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Borrower loans | 790,823 | |
Borrower Loans / Loans Held for Sale | Discount rate assumption | 200 basis point decrease | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Borrower loans | 249,805 | |
Borrower Loans / Loans Held for Sale | Default rate assumption | 100 basis point increase | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Borrower loans | 765,894 | |
Borrower Loans / Loans Held for Sale | Default rate assumption | 100 basis point increase | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Borrower loans | 241,930 | |
Borrower Loans / Loans Held for Sale | Default rate assumption | 200 basis point increase | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Borrower loans | 756,007 | |
Borrower Loans / Loans Held for Sale | Default rate assumption | 200 basis point increase | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Borrower loans | 238,807 | |
Borrower Loans / Loans Held for Sale | Default rate assumption | 100 basis point decrease | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Borrower loans | 786,541 | |
Borrower Loans / Loans Held for Sale | Default rate assumption | 100 basis point decrease | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Borrower loans | 248,453 | |
Borrower Loans / Loans Held for Sale | Default rate assumption | 200 basis point decrease | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Borrower loans | 797,065 | |
Borrower Loans / Loans Held for Sale | Default rate assumption | 200 basis point decrease | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Borrower loans | $ 251,777 | |
Discount rate | Discount rate assumption | Notes | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Measurement input | 0.0643 | |
Discount rate | Discount rate assumption | Notes | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Measurement input | 0.0643 | |
Discount rate | Borrower Loans / Loans Held for Sale | Discount rate assumption | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Measurement input | 0.0700 | |
Discount rate | Borrower Loans / Loans Held for Sale | Discount rate assumption | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Measurement input | 0.0643 | |
Default rate | Default rate assumption | Notes | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Measurement input | 0.1368 | |
Default rate | Default rate assumption | Notes | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Measurement input | 0.1368 | |
Default rate | Borrower Loans / Loans Held for Sale | Default rate assumption | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Measurement input | 0.1263 | |
Default rate | Borrower Loans / Loans Held for Sale | Default rate assumption | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Measurement input | 0.1368 |
Fair Value of Assets and Lia_11
Fair Value of Assets and Liabilities - Assumptions for Certificates Issued by Securitization Trust (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Certificates Issued by Securitization Trust, at Fair value | [1] | $ 52,168 | $ 0 |
Discount rate assumption | 100 basis point increase | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Expected fair value with change in assumptions | 51,813 | ||
Discount rate assumption | 200 basis point increase | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Expected fair value with change in assumptions | 51,466 | ||
Discount rate assumption | 100 basis point decrease | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Expected fair value with change in assumptions | 52,533 | ||
Discount rate assumption | 200 basis point decrease | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Expected fair value with change in assumptions | 52,909 | ||
Default rate assumption | 100 basis point increase | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Expected fair value with change in assumptions | 48,986 | ||
Default rate assumption | 200 basis point increase | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Expected fair value with change in assumptions | 45,926 | ||
Default rate assumption | 100 basis point decrease | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Expected fair value with change in assumptions | 55,369 | ||
Default rate assumption | 200 basis point decrease | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Expected fair value with change in assumptions | 58,613 | ||
Prepayment rate | 100 basis point increase | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Expected fair value with change in assumptions | 52,085 | ||
Prepayment rate | 200 basis point increase | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Expected fair value with change in assumptions | 52,008 | ||
Prepayment rate | 100 basis point decrease | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Expected fair value with change in assumptions | 52,253 | ||
Prepayment rate | 200 basis point decrease | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Expected fair value with change in assumptions | $ 52,340 | ||
Discount rate | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Valuation techniques | 9.59 | ||
Default rate | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Valuation techniques | 10.12 | ||
Weighted-average prepayment rate | |||
Fair Value Inputs Assets Quantitative Information [Line Items] | |||
Valuation techniques | 21.41 | ||
[1] | (1) Includes amounts in consolidated variable interest entities (VIEs) presented separately in the table below. |
Fair Value of Assets and Lia_12
Fair Value of Assets and Liabilities - Assumptions Used for Servicing Assets and Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Servicing Assets | $ 12,602 | $ 14,687 | |
Fair value resulting from: | |||
Servicing rate increase | 0.65% | ||
Servicing rate decrease | 0.60% | ||
Prepayment rate increase | 110.00% | ||
Prepayment rate decrease | 90.00% | ||
Default rate increase | 110.00% | ||
Default rate decrease | 90.00% | ||
Prosper Funding LLC | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Servicing Assets | $ 14,888 | 15,550 | |
Fair value resulting from: | |||
Servicing rate increase | 0.65% | ||
Servicing rate decrease | 0.60% | ||
Prepayment rate increase | 1.10% | ||
Prepayment rate decrease | 0.90% | ||
Default rate increase | 1.10% | ||
Default rate decrease | 0.90% | ||
Servicing Assets | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Servicing Assets | $ 12,602 | ||
Servicing Assets | Market servicing rate | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Valuation techniques | 0.625% | ||
Servicing Assets | Weighted-average prepayment rate | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Valuation techniques | 20.99% | ||
Servicing Assets | Default rate | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Valuation techniques | 12.67% | ||
Servicing Assets | Prosper Funding LLC | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Servicing Assets | $ 14,888 | $ 15,550 | $ 14,598 |
Servicing Assets | Prosper Funding LLC | Market servicing rate | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Valuation techniques | 0.625% | ||
Servicing Assets | Prosper Funding LLC | Weighted-average prepayment rate | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Valuation techniques | 20.99% | ||
Servicing Assets | Prosper Funding LLC | Default rate | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Valuation techniques | 12.67% | ||
Servicing Assets | Market servicing rate assumption | Market Servicing Rate Increase To 65% | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Expected fair value with change in assumptions | 1182500000.00% | ||
Servicing Assets | Market servicing rate assumption | Market Servicing Rate Increase To 65% | Prosper Funding LLC | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Expected fair value with change in assumptions | 1396600000.00% | ||
Servicing Assets | Market servicing rate assumption | Market Servicing Rate Decrease To 60% | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Expected fair value with change in assumptions | 1338700000.00% | ||
Servicing Assets | Market servicing rate assumption | Market Servicing Rate Decrease To 60% | Prosper Funding LLC | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Expected fair value with change in assumptions | 1581100000.00% | ||
Servicing Assets | Prepayment rate assumption | 1.1 Multiplier to Prepayment Rate | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Expected fair value with change in assumptions | 1234800000.00% | ||
Servicing Assets | Prepayment rate assumption | 1.1 Multiplier to Prepayment Rate | Prosper Funding LLC | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Expected fair value with change in assumptions | 1458300000.00% | ||
Servicing Assets | Prepayment rate assumption | 0.9 Nine Multiplier to Prepayment Rate | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Expected fair value with change in assumptions | 1286800000.00% | ||
Servicing Assets | Prepayment rate assumption | 0.9 Nine Multiplier to Prepayment Rate | Prosper Funding LLC | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Expected fair value with change in assumptions | 1519700000.00% | ||
Servicing Assets | Default rate assumption | 1.1 Multiplier to Default Rate | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Expected fair value with change in assumptions | 1237700000.00% | ||
Servicing Assets | Default rate assumption | 1.1 Multiplier to Default Rate | Prosper Funding LLC | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Expected fair value with change in assumptions | 1461800000.00% | ||
Servicing Assets | Default rate assumption | 0.9 Multiplier Default Rate | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Expected fair value with change in assumptions | 1284000000.00% | ||
Servicing Assets | Default rate assumption | 0.9 Multiplier Default Rate | Prosper Funding LLC | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Expected fair value with change in assumptions | 1516500000.00% |
Financial Instruments, Assets a
Financial Instruments, Assets and Liabilities not Recorded at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Cash and Cash Equivalents | $ 64,635 | $ 57,945 | $ 45,795 | |||
Restricted Cash and Cash Equivalents | 155,773 | [1] | 149,114 | [1] | $ 152,668 | |
Accounts Receivable | [1] | 1,695 | 5,119 | |||
Total Assets | 1,084,828 | 753,631 | ||||
Accounts Payable and Accrued Liabilities | 19,937 | 19,967 | ||||
Payable to Investors | 101,092 | 127,538 | ||||
Principal Amount Outstanding on Loans Held-for-sale or Securitization or Asset-backed Financing Arrangement | [1] | 347,662 | 0 | |||
Warehouse Lines | [1] | 131,583 | 162,488 | |||
Total Liabilities | 1,068,335 | 728,304 | ||||
Estimate of Fair Value Measurement | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Cash and Cash Equivalents | 64,635 | 57,945 | ||||
Restricted Cash and Cash Equivalents | 155,773 | 149,114 | ||||
Accounts Receivable | 5,119 | |||||
Total Assets | 222,103 | 212,178 | ||||
Accounts Payable and Accrued Liabilities | 19,937 | 19,967 | ||||
Payable to Investors | 101,092 | 127,538 | ||||
Principal Amount Outstanding on Loans Held-for-sale or Securitization or Asset-backed Financing Arrangement | 353,028 | |||||
Warehouse Lines | 131,090 | 162,488 | ||||
Total Liabilities | 605,147 | 309,993 | ||||
Reported Value Measurement | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Total Assets | 222,103 | 212,178 | ||||
Total Liabilities | 600,274 | 309,993 | ||||
Level 1 Inputs | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Cash and Cash Equivalents | 57,945 | |||||
Total Assets | 64,635 | 57,945 | ||||
Level 2 Inputs | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Restricted Cash and Cash Equivalents | 149,114 | |||||
Accounts Receivable | 5,119 | |||||
Total Assets | 157,468 | 154,233 | ||||
Accounts Payable and Accrued Liabilities | 19,967 | |||||
Payable to Investors | 127,538 | |||||
Principal Amount Outstanding on Loans Held-for-sale or Securitization or Asset-backed Financing Arrangement | 353,028 | |||||
Warehouse Lines | 131,090 | |||||
Total Liabilities | 605,147 | $ 309,993 | ||||
Level 2 Inputs | Estimate of Fair Value Measurement | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Accounts Receivable | $ 1,695 | |||||
[1] | (1) Includes amounts in consolidated variable interest entities (VIEs) presented separately in the table below. |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets, Net - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Finite Lived Intangible Assets [Line Items] | |||
Goodwill | $ 36,368,000 | $ 36,368,000 | |
Goodwill impairment expense | 0 | 0 | $ 0 |
Intangible additions | 0 | 0 | |
Impairment loss | 0 | 0 | 6,399,000 |
Amortization of intangible assets | $ 300,000 | $ 400,000 | $ 1,400,000 |
User base and customer relationships | Minimum | |||
Finite Lived Intangible Assets [Line Items] | |||
Intangible assets amortized period | 3 years | 3 years | |
User base and customer relationships | Maximum | |||
Finite Lived Intangible Assets [Line Items] | |||
Intangible assets amortized period | 10 years | ||
Developed technology | Minimum | |||
Finite Lived Intangible Assets [Line Items] | |||
Intangible assets amortized period | 3 years | 3 years | |
Developed technology | Maximum | |||
Finite Lived Intangible Assets [Line Items] | |||
Intangible assets amortized period | 5 years | ||
Brand name | |||
Finite Lived Intangible Assets [Line Items] | |||
Intangible assets amortized period | 1 year |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets, Net - Other Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 8,170 | $ 8,170 |
Accumulated Amortization | (7,450) | (7,171) |
Net Carrying Value | 720 | 999 |
Developed technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 3,060 | 3,060 |
Accumulated Amortization | (3,060) | (3,060) |
Net Carrying Value | 0 | 0 |
User base and customer relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 5,050 | 5,050 |
Accumulated Amortization | $ (4,330) | $ (4,051) |
Remaining Useful Life (In Years) | 5 years 3 months 18 days | 6 years 3 months 18 days |
Brand name | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 60 | $ 60 |
Accumulated Amortization | (60) | (60) |
Net Carrying Value | $ 0 | $ 0 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets, Net - Estimated Amortization (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | ||
2020 | $ 220 | |
2021 | 172 | |
2022 | 136 | |
2023 | 107 | |
2024 | 85 | |
Intangible assets, net | $ 720 | $ 999 |
Other Liabilities (Details)
Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Other Liabilities [Abstract] | ||
Loan trailing fee liability | $ 2,997 | $ 3,118 |
Deferred revenue | 241 | 396 |
Loan servicing liabilities | 12 | |
Deferred income tax liability | 405 | 373 |
Deferred rent | 0 | 3,408 |
Operating lease liabilities | 17,507 | |
Restructuring liability | 0 | 2,106 |
Other | 576 | 1,216 |
Total Other Liabilities | $ 21,726 | $ 10,629 |
Debt (Details)
Debt (Details) $ in Thousands | Jun. 20, 2019 | Mar. 28, 2019USD ($) | Jun. 12, 2018USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Jan. 19, 2018USD ($) | |
Debt Instrument [Line Items] | |||||||
Loans Held for Sale | [1] | $ 142,026 | $ 183,788 | ||||
Revolving Credit Facility | Warehouse Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Minimum tangible net worth | $ 25,000 | ||||||
Minimum net liquidity | $ 15,000 | ||||||
Maximum leverage ratio | 5 | ||||||
Line of credit | $ 100,000 | 81,400 | $ 200,000 | ||||
Advance rate | 89.00% | ||||||
Loans Held for Sale | 85,700 | ||||||
Remaining borrowing capacity | 119,000 | ||||||
Debt issuance costs | 1,800 | ||||||
Revolving Credit Facility | Warehouse Agreement | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Commitment fee percentage | 0.50% | ||||||
Revolving Credit Facility | PWIT Warehouse Line | |||||||
Debt Instrument [Line Items] | |||||||
Repayment period | 24 months | ||||||
Revolving Credit Facility | PWIT Warehouse Line | LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 2.90% | ||||||
Revolving Credit Facility | PWIIT Warehouse Line | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit | $ 300,000 | ||||||
Repayment period | 24 months | ||||||
Advance rate | 90.00% | ||||||
Commitment fee percentage | 0.50% | ||||||
Debt and accrued interest outstanding | 50,200 | ||||||
Loans Held for Sale | 56,500 | ||||||
Remaining borrowing capacity | 250,000 | ||||||
Debt issuance costs | $ 2,100 | ||||||
Revolving Credit Facility | PWIIT Warehouse Line | LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 2.90% | ||||||
Annual increase in basis spread on variable rate | 0.375% | ||||||
[1] | (1) Includes amounts in consolidated variable interest entities (VIEs) presented separately in the table below. |
Net Loss Per Share - Basic and
Net Loss Per Share - Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Numerator: | |||
Net Loss | $ (13,711) | $ (39,945) | $ (115,158) |
Plus: Return from shareholders on share repurchase | 1,066 | 0 | 0 |
Net income (loss) available to common stockholders | $ (12,645) | $ (39,945) | $ (115,158) |
Denominator: | |||
Weighted average shares used in computing basic and diluted net loss per share (in shares) | 70,511,605 | 70,384,501 | 69,687,836 |
Basic and diluted net loss per share (in dollars per share) | $ (0.18) | $ (0.57) | $ (1.65) |
Net Loss Per Share - Dilutive S
Net Loss Per Share - Dilutive Shares Excluded from Calculation (Details) - shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total common stock equivalents excluded from diluted net loss per common share computation (in shares) | 497,810,626 | 498,007,773 | 475,802,888 |
Convertible preferred stock issued and outstanding | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total common stock equivalents excluded from diluted net loss per common share computation (in shares) | 209,613,570 | 214,637,925 | 214,637,925 |
Stock options issued and outstanding | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total common stock equivalents excluded from diluted net loss per common share computation (in shares) | 73,851,862 | 69,023,373 | 46,722,408 |
Unvested stock options exercised | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total common stock equivalents excluded from diluted net loss per common share computation (in shares) | 0 | 0 | 11,565 |
Warrants issued and outstanding | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total common stock equivalents excluded from diluted net loss per common share computation (in shares) | 1,080,349 | 1,081,630 | 1,166,145 |
Series E-1 Convertible Preferred Stock warrants | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total common stock equivalents excluded from diluted net loss per common share computation (in shares) | 35,544,141 | 35,544,141 | 35,544,141 |
Series F Convertible Preferred Stock warrants | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total common stock equivalents excluded from diluted net loss per common share computation (in shares) | 177,720,704 | 177,720,704 | 177,720,704 |
Convertible Preferred Stock, _3
Convertible Preferred Stock, Warrant Liability and Stockholders’ Deficit - Additional Information (Details) | Dec. 23, 2019shares | Sep. 20, 2017USD ($)$ / sharesshares | Feb. 27, 2017$ / sharesshares | Dec. 16, 2016$ / sharesshares | Feb. 16, 2016 | Jul. 16, 2014USD ($)shares | Jun. 18, 2014$ / sharesshares | Apr. 30, 2017USD ($)$ / sharesshares | May 31, 2014USD ($)$ / sharesshares | Sep. 30, 2013USD ($)$ / sharesshares | Jan. 31, 2013USD ($)$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($)shares |
Class of Stock [Line Items] | ||||||||||||||
Purchase price for shares | $ | $ 0 | $ 0 | $ 47,855,000 | |||||||||||
Stock split conversion ratio | 1 | |||||||||||||
Common stock convertible ratio if preferred stock did not participate (in shares) | 10 | |||||||||||||
Repurchase of stock (in shares) | 266,130 | |||||||||||||
Preferred stock, shares authorized (in shares) | 444,760,848 | 444,760,848 | ||||||||||||
Shares authorized to be repurchased (in shares) | 7,221,020 | |||||||||||||
Dividends | $ | $ 0 | |||||||||||||
Conversion ratio of preferred stock into prosper common stock (in shares) | 1 | |||||||||||||
Common and preferred stock, shares authorized (in shares) | 1,069,760,848 | |||||||||||||
Common stock, shares authorized (in shares) | 625,000,000 | 625,000,000 | 625,000,000 | |||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||||||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 | |||||||||||||
Common stock, shares issued (in shares) | 69,387,836 | 71,411,145 | ||||||||||||
Common stock, shares outstanding (in shares) | 68,451,901 | 70,475,210 | ||||||||||||
Common Stock | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Stock split conversion ratio | 5 | |||||||||||||
Exercise of common stock warrants (in dollars per share) | $ / shares | $ 0.02 | |||||||||||||
Exercise of stock options (in shares) | 173,356 | 176,011 | ||||||||||||
Cash proceeds | $ | $ 26,000 | $ 30,000 | ||||||||||||
Warrants issued and outstanding | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Shares issued (in shares) | 8,200 | |||||||||||||
Series A | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Shares issued (in shares) | 69,340,760 | |||||||||||||
Convertible preferred stock, price per share (in dollars per share) | $ / shares | $ 0.29 | |||||||||||||
Purchase price for shares | $ | $ 19,800,000 | |||||||||||||
Repurchase of stock (in shares) | 2,130,035 | 782,540 | ||||||||||||
Preferred stock, shares authorized (in shares) | 68,558,220 | |||||||||||||
Liquidation preference per share (in dollars per share) | $ / shares | $ 0.29 | |||||||||||||
Series A-1 | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Shares issued (in shares) | 25,585,910 | |||||||||||||
Convertible preferred stock, price per share (in dollars per share) | $ / shares | $ 0.01 | |||||||||||||
Stock split conversion ratio | 1,000,000 | |||||||||||||
Liquidation preference per share (in dollars per share) | $ / shares | $ 2 | |||||||||||||
Repurchase of stock (in shares) | 2,245,600 | |||||||||||||
Preferred stock, shares authorized (in shares) | 24,760,915 | |||||||||||||
Percentage of holders of preferred stock required to request for conversion, minimum (at least) | 14.00% | |||||||||||||
Conversion ratio of preferred stock into prosper common stock (in shares) | 1,000,000 | |||||||||||||
Liquidation preference per share (in dollars per share) | $ / shares | $ 2 | |||||||||||||
Series B | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Shares issued (in shares) | 41,443,670 | |||||||||||||
Convertible preferred stock, price per share (in dollars per share) | $ / shares | $ 0.60 | |||||||||||||
Purchase price for shares | $ | $ 24,900,000 | |||||||||||||
Repurchase of stock (in shares) | 648,720 | 5,667,790 | ||||||||||||
Preferred stock, shares authorized (in shares) | 35,775,880 | |||||||||||||
Value prior to closing of underwritten initial public offering (at least) | $ | $ 2,000,000,000 | |||||||||||||
Aggregate proceeds to the entity before deducting underwriters commissions and expenses (at least) | $ | $ 100,000,000 | |||||||||||||
Liquidation preference per share (in dollars per share) | $ / shares | $ 0.60 | |||||||||||||
Common Stock | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Repurchase of stock (in shares) | 2,196,665 | |||||||||||||
Common Stock | Common Stock | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Repurchase of stock (in shares) | 2,196,665 | |||||||||||||
Series C | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Shares issued (in shares) | 24,404,770 | |||||||||||||
Convertible preferred stock, price per share (in dollars per share) | $ / shares | $ 2.87 | |||||||||||||
Purchase price for shares | $ | $ 69,900,000 | |||||||||||||
Preferred stock, shares authorized (in shares) | 24,404,770 | |||||||||||||
Liquidation preference per share (in dollars per share) | $ / shares | $ 2.87 | |||||||||||||
Series A and Series B Convertible Preferred Stock | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Shares issued (in shares) | 6,963,785 | |||||||||||||
Convertible preferred stock, price per share (in dollars per share) | $ / shares | $ 2.87 | |||||||||||||
Repurchase of preferred stock | $ | $ 18,500,000 | |||||||||||||
Series D | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Shares issued (in shares) | 23,888,640 | |||||||||||||
Convertible preferred stock, price per share (in dollars per share) | $ / shares | $ 6.91 | |||||||||||||
Purchase price for shares | $ | $ 164,800,000 | |||||||||||||
Liquidation preference per share (in dollars per share) | $ / shares | $ 6.91 | |||||||||||||
Series E | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Preferred stock, shares authorized (in shares) | 40,000,000 | |||||||||||||
Series E-1 Convertible Preferred Stock | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Preferred stock, shares authorized (in shares) | 35,544,141 | |||||||||||||
Warrant to purchase shares (in shares) | 15,277,006 | 20,267,135 | ||||||||||||
Exercise of common stock warrants (in dollars per share) | $ / shares | $ 0.01 | |||||||||||||
Liquidation preference per share (in dollars per share) | $ / shares | $ 0.84 | |||||||||||||
Warrant expiration period | 10 years | |||||||||||||
Warrants recognized in income (expense) | $ | $ 1,100,000 | $ (9,200,000) | ||||||||||||
Series E-1 Warrants | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Warrant to purchase shares (in shares) | 15,277,006 | |||||||||||||
Series F | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Preferred stock, shares authorized (in shares) | 177,720,707 | |||||||||||||
Exercise of common stock warrants (in dollars per share) | $ / shares | $ 0.01 | |||||||||||||
Percentage of holders of preferred stock required to request for conversion, minimum (at least) | 60.00% | |||||||||||||
Liquidation preference per share (in dollars per share) | $ / shares | $ 0.84 | |||||||||||||
Warrants recognized in income (expense) | $ | $ 10,100,000 | $ (35,800,000) | ||||||||||||
Series G | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Shares issued (in shares) | 37,249,497 | |||||||||||||
Preferred stock, shares authorized (in shares) | 37,249,497 | |||||||||||||
Share price (in dollars per share) | $ / shares | $ 1.34 | |||||||||||||
Proceeds net issuance cost | $ | $ 47,900,000 | |||||||||||||
Percentage of holders of preferred stock required to request for conversion, minimum (at least) | 60.00% | |||||||||||||
Liquidation preference per share (in dollars per share) | $ / shares | $ 1.34 | |||||||||||||
Convertible preferred stock | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Percentage of holders of preferred stock required to request for conversion, minimum (at least) | 60.00% | |||||||||||||
Series D | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Preferred stock, shares authorized (in shares) | 23,888,640 | |||||||||||||
Percentage of holders of preferred stock required to request for conversion, minimum (at least) | 60.00% | |||||||||||||
Series E-1 And Series E-2 Convertible Preferred Stock | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Percentage of holders of preferred stock required to request for conversion, minimum (at least) | 60.00% | |||||||||||||
Series E-2 | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Preferred stock, shares authorized (in shares) | 16,858,078 | |||||||||||||
Liquidation preference per share (in dollars per share) | $ / shares | $ 0.84 | |||||||||||||
Consortium Purchase Agreement | Series F Warrant | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Warrant to purchase shares (in shares) | 177,720,706 | |||||||||||||
Number of warrants issued to the Consortium | 3 | |||||||||||||
Exercise of common stock warrants (in dollars per share) | $ / shares | $ 0.01 |
Convertible Preferred Stock, _4
Convertible Preferred Stock, Warrant Liability and Stockholders’ Deficit - Summary of Shares Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Class of Stock [Line Items] | ||
Convertible preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Convertible preferred stock, shares authorized (in shares) | 444,760,848 | 444,760,848 |
Convertible preferred stock, shares outstanding (in shares) | 209,613,570 | 214,637,925 |
Convertible preferred stock, shares issued (in shares) | 209,613,570 | 214,637,925 |
Convertible preferred stock, aggregate liquidation preference | $ 370,456 | $ 375,952 |
Series A | ||
Class of Stock [Line Items] | ||
Convertible preferred stock, par value (in dollars per share) | $ 0.01 | |
Convertible preferred stock, shares authorized (in shares) | 68,558,220 | |
Convertible preferred stock, shares outstanding (in shares) | 66,428,185 | |
Convertible preferred stock, shares issued (in shares) | 66,428,185 | 68,558,220 |
Convertible preferred stock, aggregate liquidation preference | $ 19,160 | |
Series A-1 | ||
Class of Stock [Line Items] | ||
Convertible preferred stock, par value (in dollars per share) | $ 0.01 | |
Convertible preferred stock, shares authorized (in shares) | 24,760,915 | |
Convertible preferred stock, shares outstanding (in shares) | 22,515,315 | |
Convertible preferred stock, shares issued (in shares) | 22,515,315 | 24,760,915 |
Convertible preferred stock, aggregate liquidation preference | $ 45,031 | |
Series B | ||
Class of Stock [Line Items] | ||
Convertible preferred stock, par value (in dollars per share) | $ 0.01 | |
Convertible preferred stock, shares authorized (in shares) | 35,775,880 | |
Convertible preferred stock, shares outstanding (in shares) | 35,127,160 | |
Convertible preferred stock, shares issued (in shares) | 35,127,160 | 35,775,880 |
Convertible preferred stock, aggregate liquidation preference | $ 21,190 | |
Series C | ||
Class of Stock [Line Items] | ||
Convertible preferred stock, par value (in dollars per share) | $ 0.01 | |
Convertible preferred stock, shares authorized (in shares) | 24,404,770 | |
Convertible preferred stock, shares outstanding (in shares) | 24,404,770 | |
Convertible preferred stock, shares issued (in shares) | 24,404,770 | 24,404,770 |
Convertible preferred stock, aggregate liquidation preference | $ 70,075 | |
Series D | ||
Class of Stock [Line Items] | ||
Convertible preferred stock, par value (in dollars per share) | $ 0.01 | |
Convertible preferred stock, shares authorized (in shares) | 23,888,640 | |
Convertible preferred stock, shares outstanding (in shares) | 23,888,640 | |
Convertible preferred stock, shares issued (in shares) | 23,888,640 | 23,888,640 |
Convertible preferred stock, aggregate liquidation preference | $ 165,000 | |
Series E-1 | ||
Class of Stock [Line Items] | ||
Convertible preferred stock, par value (in dollars per share) | $ 0.01 | |
Convertible preferred stock, shares authorized (in shares) | 35,544,141 | |
Convertible preferred stock, shares outstanding (in shares) | 0 | |
Convertible preferred stock, shares issued (in shares) | 0 | 0 |
Convertible preferred stock, aggregate liquidation preference | $ 0 | |
Series E-2 | ||
Class of Stock [Line Items] | ||
Convertible preferred stock, par value (in dollars per share) | $ 0.01 | |
Convertible preferred stock, shares authorized (in shares) | 16,858,078 | |
Convertible preferred stock, shares outstanding (in shares) | 0 | |
Convertible preferred stock, shares issued (in shares) | 0 | 0 |
Convertible preferred stock, aggregate liquidation preference | $ 0 | |
Series F | ||
Class of Stock [Line Items] | ||
Convertible preferred stock, par value (in dollars per share) | $ 0.01 | |
Convertible preferred stock, shares authorized (in shares) | 177,720,707 | |
Convertible preferred stock, shares outstanding (in shares) | 3 | |
Convertible preferred stock, shares issued (in shares) | 3 | 3 |
Convertible preferred stock, aggregate liquidation preference | $ 0 | |
Series G | ||
Class of Stock [Line Items] | ||
Convertible preferred stock, par value (in dollars per share) | $ 0.01 | |
Convertible preferred stock, shares authorized (in shares) | 37,249,497 | |
Convertible preferred stock, shares outstanding (in shares) | 37,249,497 | |
Convertible preferred stock, shares issued (in shares) | 37,249,497 | 37,249,497 |
Convertible preferred stock, aggregate liquidation preference | $ 50,000 |
Convertible Preferred Stock, _5
Convertible Preferred Stock, Warrant Liability and Stockholders’ Deficit - Valuation Techniques (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Volatility | Series E-1 Convertible Preferred Stock | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | 0.460 | 0.400 |
Volatility | Series F Convertible Preferred Stock warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | 0.460 | 0.400 |
Risk-free interest rate | Series E-1 Convertible Preferred Stock | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | 0.0160 | 0.0262 |
Risk-free interest rate | Series F Convertible Preferred Stock warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | 0.0160 | 0.0263 |
Remaining contractual term (in years) | Series E-1 Convertible Preferred Stock | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Term | 2 years 9 months | 3 years |
Remaining contractual term (in years) | Series F Convertible Preferred Stock warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Term | 2 years 9 months | 3 years |
Dividend yield | Series E-1 Convertible Preferred Stock | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | 0 | 0 |
Dividend yield | Series F Convertible Preferred Stock warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | 0 | 0 |
Convertible Preferred Stock, _6
Convertible Preferred Stock, Warrant Liability and Stockholders’ Deficit - Preferred Stock Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Warrants or Rights [Roll Forward] | |||
Change in Fair Value | $ (11,235) | $ (45,004) | $ 29,140 |
Convertible Preferred Stock Warrant | |||
Warrants or Rights [Roll Forward] | |||
Beginning balance | 143,679 | 116,366 | |
Warrants vested | 17,552 | 72,316 | |
Change in Fair Value | (11,235) | (45,003) | |
Ending balance | $ 149,996 | $ 143,679 | $ 116,366 |
Shared Based Compensation - Add
Shared Based Compensation - Additional Information (Details) | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2013 | Dec. 31, 2019USD ($)shares | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Options exercisable, maximum period | 10 years | |||
Stock split conversion ratio | 1 | |||
Financial statement impact | $ 4,529,000 | $ 8,401,000 | $ 12,238,000 | |
Unrecognized cost of unvested share-based compensation awards. | 0 | |||
Unamortized expense related to unvested stock-based awards | $ 3,400,000 | |||
Remaining weighted average vesting period | 2 years 2 months 12 days | |||
Internal-use software and website development costs | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Capitalized amount | $ 310,000 | 392,000 | 294,000 | |
Stock Option Repricing | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Financial statement impact | $ 300,000 | 800,000 | 1,900,000 | |
Vesting period remaining | 3 months 18 days | |||
Restricted Stock Unit (RSUs) | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Aggregate fair value | $ 1,900,000 | $ 3,000 | ||
Restricted Stock Unit (RSUs) | Minimum | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Vesting period of the options | 3 years | 3 years | ||
Restricted Stock Unit (RSUs) | Maximum | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Vesting period of the options | 4 years | 4 years | ||
2015 Stock Option Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Number of options made available in pool, up to (in shares) | shares | 95,037,086 | |||
Tranche three | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Vesting percent | 25.00% | |||
Vesting period of the options | 1 year | |||
Tranche two | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Vesting percent | 50.00% | |||
Vesting period of the options | 2 years |
Shared Based Compensation - Sum
Shared Based Compensation - Summarized Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest [Abstract] | ||
Options outstanding, aggregate intrinsic value | $ 169 | |
Options vested and expected to vest, aggregate intrinsic value | 139 | |
Options vested and exerciseable, aggregate intrinsic value | $ 169 | |
2005 Stock Plan and 2015 Stock Option Plan | ||
Options Issued and Outstanding | ||
Options Issued and Outstanding, Beginning Balance (in shares) | 71,021,698 | |
Options Issued and Outstanding, Options granted (in shares) | 14,792,348 | |
Options Issued and Outstanding, Options exercised - vested (in shares) | (173,356) | |
Options Issued and Outstanding, Options forfeited (in shares) | (9,350,233) | |
Options Issued and Outstanding, Options expirations (in shares) | (53,700) | |
Options Issued and Outstanding, Ending balance (in shares) | 76,236,757 | 71,021,698 |
Options Issued and Outstanding, Options vested and expected to vest (in shares) | 62,647,818 | |
Options Issued and Outstanding, Options vested and exercisable (in shares) | 50,693,384 | |
Weighted- Average Exercise Price | ||
Weighted-Average Exercise Price, Beginning balance (in dollars per share) | $ 0.33 | |
Weighted-Average Exercise Price, Options granted (in dollars per share) | 0.24 | |
Weighted-Average Exercise Price, Options exercised - vested (in dollars per share) | 0.15 | |
Weighted-Average Exercise Price, Options forfeited (in dollars per share) | 0.38 | |
Weighted-Average Exercise Price, Options expirations (in dollars per share) | 0.30 | |
Weighted-Average Exercise Price, Ending balance (in dollars per share) | 0.31 | $ 0.33 |
Options expected to vest (in dollars per share) | 0.31 | |
Weighted-Average Exercise Price, Options vested and exercisable (in dollars per share) | $ 0.28 | |
Weighted-Average Contractual Term [Roll Forward] | ||
Weighted average contractual term | 7 years 4 months 28 days | 8 years 2 months 12 days |
Weighted average contractual term, Options expected to vest | 7 years 4 months 28 days | |
Weighted Average Contractual Term, Options vested and exercisable | 6 years 8 months 4 days |
Shared Based Compensation - A_2
Shared Based Compensation - Additional Information Regarding Common Stock Options (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Payment Arrangement [Abstract] | |||
Weighted average grant fair value (in dollars per share) | $ 0.11 | $ 0.52 | $ 0.28 |
Shared Based Compensation - Fai
Shared Based Compensation - Fair Value of Stock Option Awards (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Fair value of stock option awards [Abstract] | |||
Volatility of common stock | 46.70% | 44.04% | 49.24% |
Risk-free interest rate | 1.95% | 2.78% | 2.12% |
Expected life | 6 years | 6 years | 6 years |
Dividend yield | 0.00% | 0.00% | 0.00% |
Shared Based Compensation - S_2
Shared Based Compensation - Summarized Activities for RSU's (Details) - Restricted Stock Unit (RSUs) | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Number of Shares | |
Unvested beginning balance (in shares) | shares | 4,856,141 |
Granted (in shares) | shares | 0 |
Vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | (53,000) |
Unvested ending balance (in shares) | shares | 4,803,141 |
Weighted-Average Grant Date Fair Value | |
Unvested beginning balance (in dollars per share) | $ / shares | $ 0.96 |
Granted (in dollars per share) | $ / shares | 0 |
Vested (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 1.90 |
Unvested ending balance (in dollars per share) | $ / shares | $ 0.95 |
Shared Based Compensation - All
Shared Based Compensation - Allocated Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock based compensation | $ 4,528 | $ 8,401 | $ 12,238 |
Origination and Servicing | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock based compensation | 417 | 911 | 996 |
Sales and Marketing | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock based compensation | 243 | 451 | 553 |
General and Administrative | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock based compensation | $ 3,868 | $ 7,039 | $ 10,689 |
Restructuring - Restructuring R
Restructuring - Restructuring Reserve (Details) - Facilities Related $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | $ 3,244 |
Adjustments to expense | 1,486 |
Sublease cash receipts | 370 |
Less: Cash paid | (3,126) |
Ending balance | $ 1,974 |
Income Taxes - Components of In
Income Taxes - Components of Income Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current: | |||
Federal | $ 0 | $ 0 | $ 0 |
State | 0 | 0 | 0 |
Foreign | 0 | 24 | 0 |
Total Current Income Tax (Benefit) Expense | 0 | 24 | 0 |
Deferred: | |||
Federal | 47 | 47 | (579) |
State | 52 | 33 | 37 |
Foreign | 1 | 68 | 34 |
Total Deferred Income Tax Expense (Benefit) | 100 | 148 | (508) |
Total Income Tax Expense (Benefit) | $ 100 | $ 172 | $ (508) |
Income Taxes - Effective Income
Income Taxes - Effective Income Tax Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Effective income tax rate reconciliation [Abstract] | |||
Federal tax at statutory rate | 21.00% | 21.00% | 34.00% |
State tax at statutory rate (net of federal benefit) | 9.00% | 8.00% | 7.00% |
Change in U.S. Tax Rate Applied to Deferred Taxes | 0.00% | 0.00% | (31.00%) |
Incentive Stock Options | (4.00%) | (3.00%) | (1.00%) |
Preferred Stock Warrants | 8.00% | 5.00% | (21.00%) |
Change in valuation allowance | (33.00%) | (32.00%) | 11.00% |
Other | (1.00%) | 1.00% | 1.00% |
Total | 0.00% | 0.00% | 0.00% |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets and liabilities [Abstract] | ||
Net operating loss carry forwards | $ 87,834 | $ 82,510 |
Research & other credits | 602 | 668 |
Fixed assets | 42 | 463 |
Stock compensation | 10,261 | 9,237 |
Accrued liabilities | 1,858 | 3,256 |
Restructuring liability | 0 | 615 |
Other | 0 | 4 |
Lease Obligation | 5,182 | |
Deferred tax assets | 105,779 | 96,753 |
Fair value of loans | 0 | (248) |
Net servicing rights | (2,843) | (3,375) |
Intangible assets | (1,067) | (721) |
Foreign Earnings | (69) | (68) |
Right of Use Asset | (3,816) | |
Deferred tax liabilities | (7,795) | (4,412) |
Net deferred tax asset | 97,984 | 92,341 |
Valuation allowance | (98,458) | (92,714) |
Net deferred tax liability | $ (474) | $ (373) |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Unrecognized tax benefits [Roll Forward] | ||
Balance at January 1, | $ 112 | $ 112 |
Decrease related to current year tax position | 0 | 0 |
Balance at December 31, | $ 112 | $ 112 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Tax Credit Carryforward [Line Items] | |||
Federal tax at statutory rate | 21.00% | 21.00% | 34.00% |
Deferred tax assets valuation, increase amount | $ 5,800,000 | ||
Valuation allowance | 98,458,000 | $ 92,714,000 | |
Unrecognized tax benefits that would affect effective tax rate | 0 | ||
Interest and penalties related to uncertain tax positions | 0 | ||
Income tax expense | $ 100,000 | $ 172,000 | $ (508,000) |
Effective tax rate | 0.00% | 0.00% | 0.00% |
Prosper Funding LLC | |||
Tax Credit Carryforward [Line Items] | |||
Income tax expense | $ 0 | $ 0 | |
Effective tax rate | 0.00% | ||
Federal | |||
Tax Credit Carryforward [Line Items] | |||
Net operating loss carryforwards | $ 326,600,000 | ||
Federal | Research and development | |||
Tax Credit Carryforward [Line Items] | |||
Tax credit carryforwards | 428,500 | ||
State | |||
Tax Credit Carryforward [Line Items] | |||
Net operating loss carryforwards | $ 360,500,000 | ||
Tax period subject to examination | 4 years | ||
California | Research and development | |||
Tax Credit Carryforward [Line Items] | |||
Tax credit carryforwards | $ 449,500 | ||
California | Enterprise Zone Credit | |||
Tax Credit Carryforward [Line Items] | |||
Tax credit carryforwards | $ 1,100,000 | ||
Internal Revenue Service (IRS) | |||
Tax Credit Carryforward [Line Items] | |||
Tax period subject to examination | 3 years |
Consortium Purchase Agreement -
Consortium Purchase Agreement - Narrative (Details) - Consortium Purchase Agreement - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Feb. 27, 2017 | |
Other Commitments [Line Items] | ||||
Principal amount (up to) | $ 3,600,000 | $ 5,000,000 | ||
Loans acquired | 3,303,283 | $ 3,067,332 | $ 1,826,527 | |
Value of warrants issued to settle rebates on loan purchases | 300,000 | |||
Aggregate loan purchases | $ 3,600,000 | $ 5,000,000 | ||
Series F Warrant | ||||
Other Commitments [Line Items] | ||||
Number of warrants | 3 | |||
Maximum warrant for purchase shares (in shares) | 177,720,706 | |||
Exercise of common stock warrants (in dollars per share) | $ 0.01 |
Consortium Purchase Agreement_2
Consortium Purchase Agreement - Consortium Agreement Table (Details) - Consortium Purchase Agreement - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Class of Warrant or Right [Line Items] | |||
Loans Acquired | $ 3,303,283 | $ 3,067,332 | $ 1,826,527 |
Loans Purchased by the Consortium | $ 235,951 | $ 1,240,805 | |
Series F Warrant | |||
Class of Warrant or Right [Line Items] | |||
Warrants Vested (in shares) | 177,720,706 | 154,912,980 | 75,186,002 |
Warrants vested during the year (in shares) | 22,807,726 | 79,726,978 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Lessee, Lease, Description [Line Items] | |||
Renewal term | 5 years | ||
Operating lease rental expense | $ 4.5 | $ 4.2 | $ 4.7 |
Sublease income | $ 0.8 | 0.8 | $ 0.3 |
Minimum sublease rentals | $ 5.3 | ||
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining lease term | 3 months | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining lease term | 7 years |
Leases - Operating Lease Right-
Leases - Operating Lease Right-of-Use Assets (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Lessee, Lease, Description [Line Items] | |
Gross Carrying Value | $ 16,213 |
Accumulated Amortization | 3,494 |
Net Carrying Value | 12,719 |
ROU assets - office buildings | |
Lessee, Lease, Description [Line Items] | |
Gross Carrying Value | 15,921 |
Accumulated Amortization | 3,262 |
Net Carrying Value | 12,659 |
ROU assets - other | |
Lessee, Lease, Description [Line Items] | |
Gross Carrying Value | 292 |
Accumulated Amortization | 232 |
Net Carrying Value | $ 60 |
Leases - Schedule of Lease Matu
Leases - Schedule of Lease Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
2020 | $ 5,236 | |
2021 | 5,130 | |
2022 | 5,014 | |
2023 | 1,562 | |
2024 | 871 | |
Thereafter | 1,820 | |
Total future minimum lease payments | 19,633 | |
Less: Imputed interest | (2,126) | |
Present value of future minimum lease payments | $ 17,507 | |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||
2019 | $ 4,536 | |
2020 | 4,683 | |
2021 | 4,456 | |
2022 | 4,319 | |
2023 | 847 | |
Thereafter | 387 | |
Total future operating lease obligations | $ 19,228 |
Leases - Other Information Rela
Leases - Other Information Related to Leases (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Dec. 31, 2019 |
Leases [Abstract] | ||
Cash paid for operating leases year-to-date | $ 5,228 | |
Right of use assets obtained in exchange for new operating lease obligations | $ 21,700 | $ 21,706 |
Weighted average remaining lease term | 4 years 1 month 28 days | |
Weighted average discount rate | 5.54% |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Apr. 30, 2019 | Apr. 30, 2017 | Dec. 31, 2019 | Dec. 31, 2017 | Dec. 31, 2018 | |
Entity Information [Line Items] | |||||
Aggregate designated amount (less than) | $ 143,500 | ||||
Minimum net liquidity | 15,000,000 | ||||
Purchase of borrower loans | 18,600,000 | ||||
Maximum potential future payments | 3,100,000,000 | ||||
Accrued repurchase and indemnification obligation | 400,000 | $ 900,000 | |||
Settlement installment | $ 3,000,000 | ||||
Civil monetary penalty agreed upon | $ 3,000,000 | ||||
Prosper Funding LLC | |||||
Entity Information [Line Items] | |||||
Aggregate designated amount (less than) | 143,500 | ||||
Minimum fee next twelve months | 1,700,000 | ||||
Minimum fee year two | 1,700,000 | ||||
Minimum fee year three | 100,000 | ||||
Minimum net liquidity | 15,000,000 | ||||
Purchase of borrower loans | 18,600,000 | ||||
Maximum potential future payments | 3,700,000,000 | ||||
Accrued repurchase and indemnification obligation | $ 400,000 | $ 900,000 | |||
Civil monetary penalty agreed upon | $ 3,000,000 | ||||
Penalty paid | $ 3,000,000 |
Related Parties - Additional In
Related Parties - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Minimum percentage of voting securities considered for related parties (more than) | 10.00% |
Minimum percentage of stock holders considered for related parties | 10.00% |
Related Parties - Aggregate Amo
Related Parties - Aggregate Amount of Notes Purchased and the Income Earned (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Related Party Transaction [Line Items] | ||
Aggregate Amount of Notes Purchased | $ 487 | $ 450 |
Interest Earned on Notes | 61 | 47 |
Notes balance | 717 | 601 |
Prosper Funding LLC | ||
Related Party Transaction [Line Items] | ||
Aggregate Amount of Notes Purchased | 23 | 29 |
Interest Earned on Notes | 5 | 2 |
Notes balance | 35 | 32 |
Executive officers and management | ||
Related Party Transaction [Line Items] | ||
Aggregate Amount of Notes Purchased | 23 | 29 |
Interest Earned on Notes | 5 | 2 |
Notes balance | 35 | 32 |
Executive officers and management | Prosper Funding LLC | ||
Related Party Transaction [Line Items] | ||
Aggregate Amount of Notes Purchased | 23 | 29 |
Interest Earned on Notes | 5 | 2 |
Notes balance | 35 | 32 |
Directors | ||
Related Party Transaction [Line Items] | ||
Aggregate Amount of Notes Purchased | 464 | 421 |
Interest Earned on Notes | 56 | 45 |
Notes balance | 682 | 569 |
Directors | Prosper Funding LLC | ||
Related Party Transaction [Line Items] | ||
Aggregate Amount of Notes Purchased | 0 | 0 |
Interest Earned on Notes | 0 | 0 |
Notes balance | $ 0 | $ 0 |
Postretirement Benefit Plans (D
Postretirement Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |||
Deferred compensation arrangement with eligible employees, percentage (up to) | 90.00% | ||
Employer contribution during the period | $ 2.3 | $ 2 | $ 2.2 |
Significant Concentrations (Det
Significant Concentrations (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Concentration Risk [Line Items] | ||
Percentage of fund from whole loan channel | 94.00% | 94.00% |
Prosper Funding LLC | ||
Concentration Risk [Line Items] | ||
Percentage of fund from whole loan channel | 94.00% | 94.00% |
Party 1 | ||
Concentration Risk [Line Items] | ||
Percentage of loans purchased | 9.40% | 43.70% |
Party 1 | Prosper Funding LLC | ||
Concentration Risk [Line Items] | ||
Percentage of loans purchased | 9.40% | 43.70% |
Segments (Details)
Segments (Details) | 12 Months Ended |
Dec. 31, 2018segment | |
Segment Reporting [Abstract] | |
Number of reporting segments | 1 |
Number of operating segments | 1 |