Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 03, 2017 | Jun. 30, 2016 | |
Document And Entity Information [Line Items] | |||
Entity Registrant Name | PROSPER MARKETPLACE, INC | ||
Entity Central Index Key | 1,416,265 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Public Float | $ 0 | ||
Entity Common Stock, Shares Outstanding | 69,702,689 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2016 | ||
Prosper Funding LLC | |||
Document And Entity Information [Line Items] | |||
Entity Registrant Name | Prosper Funding LLC | ||
Entity Central Index Key | 1,542,574 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 0 | ||
Entity Common Stock, Shares Outstanding | 0 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
ASSETS | ||
Cash and Cash Equivalents | $ 22,337 | $ 66,295 |
Restricted Cash | 163,907 | 151,223 |
Available for Sale Investments, at Fair Value | 32,769 | 73,187 |
Accounts Receivable | 757 | 2,434 |
Loans Held for Sale, at Fair Value | 624 | 32 |
Borrower Loans, at Fair Value | 315,627 | 297,273 |
Property and Equipment, Net | 24,853 | 24,965 |
Prepaid and Other Assets | 4,606 | 6,433 |
Servicing Assets | 12,786 | 14,363 |
Goodwill | 36,368 | 36,368 |
Intangible Assets, Net | 9,212 | 13,051 |
Total Assets | 623,846 | 685,624 |
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT | ||
Accounts Payable and Accrued Liabilities | 15,017 | 22,409 |
Payable to Investors | 142,644 | 136,507 |
Notes, at Fair Value | 316,236 | 297,405 |
Other Liabilities | 17,173 | 20,735 |
Convertible Preferred Stock Warrant Liability | 21,711 | 0 |
Total Liabilities | 512,781 | 477,056 |
Commitments and Contingencies (see Note 18) | ||
Convertible Preferred Stock – $0.01 par value; 217,388,425 shares authorized; 177,388,425 issued and outstanding as of December 31, 2016; 177,388,425 shares authorized; 177,388,425 issued and outstanding as of December 31, 2015. Aggregate liquidation preference of $325,952 as of December 31, 2016 and 2015. | 275,938 | 275,938 |
Stockholders' Deficit | ||
Common Stock – $0.01 par value; 338,222,103 shares authorized; 70,704,141 shares issued and 69,907,109 outstanding as of December 31, 2016; 270,326,075 shares authorized; 70,367,425 issued and 69,431,490 outstanding as of December 31, 2015 | 212 | 127 |
Additional Paid-In Capital | 123,988 | 102,971 |
Less: Treasury Stock | (23,417) | (23,417) |
Accumulated Deficit | (265,648) | (146,907) |
Accumulated Other Comprehensive Loss | (8) | (144) |
Total Stockholders' Deficit | (164,873) | (67,370) |
Total Liabilities, Convertible Preferred Stock and Stockholders' Deficit | 623,846 | 685,624 |
Prosper Funding LLC | ||
ASSETS | ||
Cash and Cash Equivalents | 6,929 | 15,026 |
Restricted Cash | 147,983 | 139,937 |
Short Term Investments | 1,280 | 1,277 |
Available for Sale Investments, at Fair Value | 624 | 32 |
Loans Held for Sale, at Fair Value | 624 | 32 |
Borrower Loans, at Fair Value | 315,627 | 297,273 |
Property and Equipment, Net | 10,095 | 8,419 |
Servicing Assets | 12,461 | 13,605 |
Other Assets | 186 | 122 |
Total Assets | 495,185 | 475,691 |
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT | ||
Accounts Payable and Accrued Liabilities | 2,223 | 2,122 |
Payable to Related Party | 1,899 | 2,989 |
Payable to Investors | 141,625 | 135,661 |
Notes, at Fair Value | 316,236 | 297,405 |
Other Liabilities | 1,877 | 1,209 |
Total Liabilities | 463,860 | 439,386 |
Stockholders' Deficit | ||
Member's Equity | 30,704 | 0 |
Accumulated Deficit | 621 | 36,305 |
Total Stockholders' Deficit | 31,325 | 36,305 |
Total Liabilities, Convertible Preferred Stock and Stockholders' Deficit | $ 495,185 | $ 475,691 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) $ in Thousands | Feb. 16, 2016 | Jan. 31, 2013 | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | May 15, 2014$ / sharesshares |
Statement of Financial Position [Abstract] | |||||
Convertible preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | |||
Convertible preferred stock, shares authorized (in shares) | 217,388,425 | 177,388,425 | 217,388,425 | ||
Convertible preferred stock, shares issued (in shares) | 177,388,425 | 177,388,425 | |||
Convertible preferred stock, shares outstanding (in shares) | 177,388,425 | 177,388,425 | |||
Convertible preferred stock, aggregate liquidation preference | $ | $ 325,952 | $ 325,952 | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | ||
Common stock, shares authorized (in shares) | 338,222,103 | 270,326,075 | 338,222,425 | ||
Common stock, shares issued (in shares) | 70,843,044 | 70,367,425 | |||
Common stock, shares outstanding (in shares) | 69,907,109 | 69,431,490 | |||
Stock split conversion ratio | 5 | 1 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating Revenues | |||
Transaction Fees, Net | $ 95,130,000 | $ 161,708,000 | $ 68,229,000 |
Servicing Fees, Net | 28,903,000 | 17,238,000 | 4,552,000 |
Gain on Sale of Borrower Loans | 3,637,000 | 14,151,000 | 3,227,000 |
Other Revenues | 5,245,000 | 7,687,000 | 1,828,000 |
Total Operating Revenues | 132,915,000 | 200,784,000 | 77,836,000 |
Interest Income | |||
Interest Income on Borrower Loans | 44,649,000 | 41,606,000 | 42,087,000 |
Interest Expense on Notes | (41,187,000) | (38,174,000) | (38,734,000) |
Net Interest Income | 3,462,000 | 3,432,000 | 3,353,000 |
Change in Fair Value of Borrower Loans, Loans Held for Sale and Notes, Net | (372,000) | 59,000 | 128,000 |
Total Net Revenues | 136,005,000 | 204,275,000 | 81,317,000 |
Expenses | |||
Origination and Servicing | 33,944,000 | 31,139,000 | 14,098,000 |
Sales and Marketing | 70,146,000 | 112,284,000 | 41,971,000 |
General and Administrative | 102,735,000 | 86,480,000 | 27,917,000 |
Restructuring Charges, Net | 17,027,000 | 0 | 0 |
Other Expenses, Net | 30,348,000 | 0 | 0 |
Total Expenses | 254,200,000 | 229,903,000 | 83,986,000 |
Net Loss Before Taxes | (118,195,000) | (25,628,000) | (2,669,000) |
Income Tax Expense | 546,000 | 340,000 | 0 |
Net Loss | (118,741,000) | (25,968,000) | (2,669,000) |
Excess Return to Preferred Shareholders on Repurchase | 0 | 0 | (14,892,000) |
Net Loss Applicable to Common Shareholders | $ (118,741,000) | $ (25,968,000) | $ (17,561,000) |
Net Loss Per Share – Basic and Diluted (in dollars per share) | $ (1.85) | $ (0.47) | $ (0.39) |
Weighted-Average Shares - Basic and Diluted (in shares) | 64,196,537 | 55,547,408 | 44,484,005 |
Prosper Funding LLC | |||
Operating Revenues | |||
Administration Fee Revenue – Related Party | $ 36,630,000 | $ 57,919,000 | |
Servicing Fees, Net | 28,604,000 | 16,218,000 | |
Gain on Sale of Borrower Loans | 3,637,000 | 14,151,000 | |
Other Revenues | 478,000 | 1,500,000 | |
Total Operating Revenues | 69,349,000 | 89,788,000 | |
Interest Income | |||
Interest Income on Borrower Loans | 44,649,000 | 41,380,000 | |
Interest Expense on Notes | (41,187,000) | (38,174,000) | |
Net Interest Income | 3,462,000 | 3,206,000 | |
Change in Fair Value of Borrower Loans, Loans Held for Sale and Notes, Net | (372,000) | 59,000 | |
Total Net Revenues | 72,439,000 | 93,053,000 | |
Expenses | |||
Administration Fee – Related Party | 62,203,000 | 62,786,000 | |
Servicing | 5,395,000 | 3,705,000 | |
General and Administrative | 1,321,000 | 1,227,000 | |
Other Expenses, Net | 30,704,000 | 0 | |
Total Expenses | 99,623,000 | 67,718,000 | |
Income Tax Expense | 0 | 0 | |
Net Loss | $ (27,184,000) | $ 25,335,000 |
Consolidated Statements of Othe
Consolidated Statements of Other Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Net Loss | $ (118,741) | $ (25,968) | $ (2,669) |
Other Comprehensive Income (Loss), Before Tax | |||
Change in Net Unrealized Gain (Loss) on Available for Sale Investments, at Fair Value | 148 | (144) | 0 |
Realized (Gain) Loss on Sale of Available for Sale Investments, at Fair Value | (12) | 0 | 0 |
Other Comprehensive Income (Loss), Before Tax | 136 | (144) | 0 |
Income tax effect | 0 | 0 | 0 |
Other Comprehensive Income (Loss), Net of Tax | 136 | (144) | 0 |
Comprehensive Loss | $ (118,605) | $ (26,112) | $ (2,669) |
Consolidated Statements of Conv
Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Total | Restricted Stock | Convertible Preferred Stock | Convertible Preferred StockNew Series C | Convertible Preferred StockNew Series D | Common Stock | Common StockRestricted Stock | Treasury Stock | Treasury StockRestricted Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income | Retained Earnings (Accumulated Deficit) | Prosper Funding LLC | Prosper Funding LLCMember’s Equity | Prosper Funding LLCRetained Earnings (Accumulated Deficit) |
Balance at Dec. 31, 2013 | $ (20,492) | $ 44,822 | $ 75 | $ (291) | $ 83,676 | $ (103,952) | |||||||||
Balance (in shares) at Dec. 31, 2013 | 136,370,340 | 67,944,015 | (911,320) | ||||||||||||
Entity Information [Line Items] | |||||||||||||||
Issuance of convertible preferred stock | $ 69,958 | ||||||||||||||
Issuance of convertible preferred stock (in shares) | 24,404,770 | ||||||||||||||
Exercise of vested stock options | 77 | $ 1 | 76 | ||||||||||||
Exercise of vested stock options (in shares) | 295,750 | ||||||||||||||
Exercise of nonvested stock options (in shares) | 4,328,585 | ||||||||||||||
Repurchase of stock | (14,892) | $ (12) | $ (3,635) | $ (12) | (14,892) | ||||||||||
Repurchase of stock (in shares) | (7,275,325) | (909,465) | (24,615) | ||||||||||||
Restricted stock vested | 345 | $ 25 | 320 | ||||||||||||
Exercise of warrants | 227 | $ 1 | 226 | ||||||||||||
Exercise of warrants (in shares) | 584,615 | ||||||||||||||
Stock-based compensation expense | 2,042 | 2,042 | |||||||||||||
Net Income (Loss) | (2,669) | (2,669) | |||||||||||||
Balance at Dec. 31, 2014 | (35,374) | $ 111,145 | $ 102 | $ (303) | 86,340 | (121,513) | $ 46,291 | $ 29,619 | $ 16,672 | ||||||
Balance (in shares) at Dec. 31, 2014 | 153,499,785 | 72,243,500 | (935,935) | ||||||||||||
Entity Information [Line Items] | |||||||||||||||
Cumulative effect of adoption of fair value method for servicing rights | 574 | 574 | |||||||||||||
Issuance of convertible preferred stock | $ 164,793 | ||||||||||||||
Issuance of convertible preferred stock (in shares) | 23,888,640 | ||||||||||||||
Exercise of vested stock options | 779 | $ 8 | 771 | ||||||||||||
Exercise of vested stock options (in shares) | 3,125,890 | ||||||||||||||
Exercise of nonvested stock options (in shares) | 76,045 | ||||||||||||||
Repurchase of stock | (23,114) | $ (23,114) | |||||||||||||
Repurchase of stock (in shares) | (1,493,775) | (4,241,300) | |||||||||||||
Restricted stock vested | 488 | $ 17 | 471 | ||||||||||||
Restricted stock units sold | 1,630 | 1,630 | |||||||||||||
Restricted stock units sold (in shares) | 450,000 | ||||||||||||||
Exercise of warrants | 125 | 125 | |||||||||||||
Exercise of warrants (in shares) | 207,065 | ||||||||||||||
Stock-based compensation expense | 13,634 | 13,634 | |||||||||||||
Change in net unrealized loss on available for sale investments, at fair value | (144) | $ (144) | |||||||||||||
Net Income (Loss) | (25,968) | (25,968) | 25,335 | 25,335 | |||||||||||
Capital Infusion from Parent | (35,500) | (29,370) | (6,130) | ||||||||||||
Transfer of Servicing Rights to Parent | (249) | (249) | |||||||||||||
Adjustment to Servicing Rights on Transition to Fair Value | 428 | 428 | |||||||||||||
Contributions by Parent | 0 | ||||||||||||||
Balance at Dec. 31, 2015 | (67,370) | $ 275,938 | $ 127 | $ (23,417) | 102,971 | (144) | (146,907) | 36,305 | 0 | 36,305 | |||||
Balance (in shares) at Dec. 31, 2015 | 177,388,425 | 74,608,725 | (5,177,235) | ||||||||||||
Entity Information [Line Items] | |||||||||||||||
Exercise of vested stock options | 311 | $ 6 | 305 | ||||||||||||
Exercise of vested stock options (in shares) | 466,300 | ||||||||||||||
Repurchase of stock (in shares) | (673,750) | ||||||||||||||
Restricted stock vested | 275 | $ 79 | 196 | ||||||||||||
Restricted stock units issued (in shares) | 635,068 | ||||||||||||||
Exercise of warrants | 11 | 11 | |||||||||||||
Exercise of warrants (in shares) | 48,001 | ||||||||||||||
Stock-based compensation expense | 20,505 | 20,505 | |||||||||||||
Change in net unrealized loss on available for sale investments, at fair value | 136 | 136 | |||||||||||||
Net Income (Loss) | (118,741) | (118,741) | (27,184) | (27,184) | |||||||||||
Distributions to Parent | (8,500) | (8,500) | |||||||||||||
Contributions by Parent | 30,704 | 30,704 | 0 | ||||||||||||
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) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash Flows from Operating Activities: | |||
Net Loss | $ (118,741) | $ (25,968) | $ (2,669) |
Adjustments to Reconcile Net Loss to Net Cash Provided by (Used in) Operating Activities: | |||
Change in Fair Value of Borrower Loans, Loans Held for Sale and Notes | 372 | (59) | (596) |
Depreciation and Amortization | 13,220 | 7,649 | 2,097 |
Gain on Sales of Borrower Loans | (9,634) | (14,561) | (4,048) |
Amortization and Change in Fair Value of Servicing Rights | 11,053 | 4,860 | 792 |
Stock-Based Compensation Expense | 19,787 | 13,011 | 2,021 |
Restructuring Liability | 6,052 | 0 | 0 |
Change in Fair Value of Contingent Consideration | 199 | 1,001 | 0 |
Other, Net | 1,534 | 216 | 444 |
Warrants Issued for Contract Termination | 21,711 | 0 | 0 |
Changes in Operating Assets and Liabilities: | |||
Purchase of Loans Held for Sale at Fair Value | (1,979,952) | (3,517,467) | (1,416,715) |
Proceeds from Sales and Principal Payments of Loans Held for Sale at Fair Value | 1,979,352 | 3,525,759 | 1,411,531 |
Restricted Cash Except for those Related to Investing Activities | (5,459) | (68,896) | (28,125) |
Accounts Receivable | 1,677 | 865 | (2,856) |
Prepaid and Other Assets | 1,825 | (1,360) | (2,840) |
Accounts Payable and Accrued Liabilities | 379 | 6,493 | 8,047 |
Payable to Investors | 6,137 | 72,013 | 26,469 |
Other Liabilities | (12,179) | 1,888 | 1,797 |
Net cash provided by (Used in) Operating Activities | (62,667) | 5,444 | (4,651) |
Cash Flows from Investing Activities: | |||
Purchase of Borrower Loans Held at Fair Value | (217,582) | (197,436) | (177,088) |
Principal Payments of Borrower Loans Held at Fair Value | 173,710 | 151,893 | 121,082 |
Purchases of Property and Equipment | (10,760) | (15,977) | (12,246) |
Maturities of Short Term Investments | 1,279 | 1,274 | 1,271 |
Purchases of Short Term Investments | (1,277) | (1,277) | (1,274) |
Purchases of Available for Sale Investments, at Fair Value | (11,725) | (77,538) | 0 |
Proceeds from Sale of Available for Sale Securities | 12,445 | 4,022 | 0 |
Maturities of Available for Sale Securities | 39,593 | 0 | 0 |
Acquisition of Businesses, Net of Cash Acquired | 0 | (38,147) | 0 |
Changes in Restricted Cash Related to Investing Activities | (7,225) | (1,027) | (3,351) |
Net Cash Used in Investing Activities | (21,542) | (174,213) | (71,606) |
Cash Flows from Financing Activities: | |||
Proceeds from Issuance of Notes Held at Fair Value | 217,767 | 197,228 | 176,865 |
Payments of Notes Held at Fair Value | (173,958) | (151,838) | (120,909) |
Repayment of Borrowings | 0 | (5,047) | 0 |
Proceeds from Issuance of Convertible Preferred Stock, Net | 0 | 164,793 | 69,958 |
Proceeds from Exercise of Warrants and Stock Options including Early Exercise, and Issuance of Restricted Stock | 541 | 5,004 | 1,118 |
Repurchase of Common Stock and Restricted Stock | (80) | (23,246) | (30) |
Repurchase of Preferred Stock | 0 | 0 | (18,527) |
Taxes Paid for Awards Vested Under Equity Incentive Plans | (219) | (2,387) | 0 |
Contingent Consideration Paid | (3,800) | 0 | 0 |
Net Cash Provided by Financing Activities | 40,251 | 184,507 | 108,475 |
Net Increase (Decrease) in Cash and Cash Equivalents | (43,958) | 15,738 | 32,218 |
Cash and Cash Equivalents at Beginning of the Year | 66,295 | 50,557 | 18,339 |
Cash and Cash Equivalents at End of the Year | 22,337 | 66,295 | 50,557 |
Supplemental Disclosure of Cash Flow Information: | |||
Cash Paid for Interest | 40,369 | 38,168 | 41,053 |
Non-Cash Investing Activity- Accrual for Property and Equipment, Net | 382 | 1,483 | 1,550 |
Non-Cash Investing Activity- Amount Payable for the Acquisition of Business | 0 | 4,488 | 0 |
Prosper Funding LLC | |||
Cash Flows from Operating Activities: | |||
Net Loss | (27,184) | 25,335 | |
Adjustments to Reconcile Net Loss to Net Cash Provided by (Used in) Operating Activities: | |||
Change in Fair Value of Borrower Loans, Loans Held for Sale and Notes | 372 | (59) | |
Other Non-Cash Changes in Borrower Loans, Loans Held for Sale and Notes | 176 | (57) | |
Depreciation and Amortization | 4,083 | 3,161 | |
Loss on Contract Termination | 30,704 | 0 | |
Gain on Sales of Borrower Loans | (9,634) | (14,561) | |
Amortization and Change in Fair Value of Servicing Rights | 10,620 | 4,176 | |
Other, Net | (128) | 0 | |
Changes in Operating Assets and Liabilities: | |||
Purchase of Loans Held for Sale at Fair Value | (1,979,952) | (3,517,467) | |
Proceeds from Sales and Principal Payments of Loans Held for Sale at Fair Value | 1,979,352 | 3,525,759 | |
Restricted Cash Except for those Related to Investing Activities | (5,268) | (68,776) | |
Other Assets | (64) | (118) | |
Accounts Payable and Accrued Liabilities | 101 | 1,510 | |
Payable to Investors | 5,964 | 71,852 | |
Net Related Party Receivable/Payable | (1,260) | 2,880 | |
Other Liabilities | 954 | 539 | |
Net cash provided by (Used in) Operating Activities | 8,836 | 34,174 | |
Cash Flows from Investing Activities: | |||
Purchase of Borrower Loans Held at Fair Value | (217,582) | (197,436) | |
Principal Payments of Borrower Loans Held at Fair Value | 173,710 | 151,893 | |
Purchases of Property and Equipment | (5,589) | (9,211) | |
Maturities of Short Term Investments | 1,277 | 1,274 | |
Purchases of Short Term Investments | (1,280) | (1,277) | |
Changes in Restricted Cash Related to Investing Activities | (2,778) | 1,942 | |
Net Cash Used in Investing Activities | (52,242) | (52,815) | |
Cash Flows from Financing Activities: | |||
Proceeds from Issuance of Notes Held at Fair Value | 217,767 | 197,228 | |
Payments of Notes Held at Fair Value | (173,958) | (151,838) | |
Cash Distributions to Parent | (8,500) | (35,500) | |
Loan Advances to Parent | 0 | (10,000) | |
Loan Repayments from Parent | 0 | 10,000 | |
Net Cash Provided by Financing Activities | 35,309 | 9,890 | |
Net Increase (Decrease) in Cash and Cash Equivalents | (8,097) | (8,751) | |
Cash and Cash Equivalents at Beginning of the Year | 15,026 | 23,777 | |
Cash and Cash Equivalents at End of the Year | 6,929 | 15,026 | $ 23,777 |
Supplemental Disclosure of Cash Flow Information: | |||
Cash Paid for Interest | 40,597 | 38,168 | |
Non-Cash Investing Activity- Accrual for Property and Equipment, Net | 1,606 | 1,436 | |
Non-Cash Operating Activity - Servicing Rights Fair Value Adjustment | 0 | 428 | |
Non-Cash Financing Activity, Distribution to Parent | 0 | 249 | |
Non-Cash Financing Activity, Contribution by Parent | $ 30,704 | $ 0 |
Organization and Business
Organization and Business | 12 Months Ended |
Dec. 31, 2016 | |
Entity Information [Line Items] | |
Organization and Business | Organization and Business Prosper Marketplace, Inc. (“PMI”) 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,” “we,” “us,” and “our” refer to PMI 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, 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, 2016 , the marketplace is open to investors in 30 states and the District of Columbia. Additionally, as of December 31, 2016 , the marketplace is open to borrowers in 45 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 (“PFL”) was formed in the state of Delaware in February 2012 as a limited liability company with the sole equity member being Prosper Marketplace, Inc. (“PMI”). Except as the context otherwise requires, as used in these Notes to Consolidated Financial Statements of Prosper Funding LLC, “Prosper Funding,” “we,” “us,” and “our” refers to PFL and its wholly owned subsidiary, Prosper Asset Holdings LLC (“PAH”), a Delaware limited liability company, on a consolidated basis. PFL 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 PFL. 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 PFL and PMI, PMI manages all other aspects of the marketplace on behalf of PFL. As a result Prosper Funding earns significant amounts of 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, or listing, on the marketplace. PFL allocates listings 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 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 PFL. 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 or five years as of December 31, 2016 . All loans made through the marketplace are funded by WebBank, an FDIC-insured, Utah chartered industrial bank. After funding a loan, WebBank sells the loan to PFL, without recourse to WebBank, in exchange for the principal amount of the loan. WebBank does not have any obligation to purchasers of the Notes. Prosper Funding’s 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 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, 2016 , Prosper Funding’s marketplace was open to investors in 30 states and the District of Columbia. Additionally, as of December 31, 2016 Prosper Funding’s marketplace was open to borrowers in 45 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, 2016 | |
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, PHL and BillGuard. 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”). On January 23, 2015 , PMI acquired all of the outstanding limited liability company units of American HealthCare Lending, LLC (“American HealthCare Lending”), a company that operated a patient financing platform, and merged American HealthCare Lending with and into Prosper Healthcare Lending LLC (“PHL”), a newly established entity surviving the merger. Prosper’s consolidated financial statements include PHL’s results of operations and financial position from the date of acquisition forward (see Note 8 – American HealthCare Lending Acquisition ). On October 9, 2015 , PMI acquired all of the outstanding stock of BillGuard, Inc . (“BillGuard”), a company incorporated in Delaware in 2010 that developed applications that help consumers manage their identity, finances and credit. PMI merged BillGuard with and into Beach Merger Sub, Inc., a newly established entity wholly owned by PMI, with BillGuard surviving the merger. Prosper’s consolidated financial statements include BillGuard’s results of operations and financial position from the date of acquisition forward (see Note 9 – BillGuard Acquisition ). Use of Estimates The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States 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, valuation of servicing rights, valuation allowance on deferred tax assets, stock-based compensation expense, intangible assets, goodwill, contingent consideration, restructuring liability, convertible preferred stock warrant liability and contingent liabilities. Actual results could differ from those estimates. Certain Risks In the normal course of its business, Prosper encounters significant credit risk. Financial instruments that potentially subject Prosper to significant credit risk consist primarily of cash, cash equivalents, available for sale investments, Borrower Loans held and restricted cash. Prosper places cash, cash equivalents, and restricted cash with high-quality financial institutions and is exposed to credit risk in the event of default by these institutions to the extent the amount recorded on the balance sheet exceeds federally insured amounts. Prosper performs periodic evaluations of the relative credit standing of these financial institutions and has not recognized any losses in earnings from instruments held at these financial institutions. As a lending marketplace, Prosper believes its customers are highly susceptible to uncertainties and negative trends, real or perceived, in the markets driven by, among other factors, general economic conditions in the United States and abroad. These external economic conditions and resulting trends or uncertainties could adversely impact its customers’ ability or desire to participate on its marketplace as borrowers or investors, and consequently could negatively affect its business and results of operations. To the extent that payments on Borrower Loans (including Borrower Loans that have been sold) are not made, interest income and/or servicing income will be reduced. A series of Notes corresponding to a particular Borrower Loan is wholly dependent on the repayment of such Borrower Loan. As a result, Prosper does not bear the credit risk on such Borrower Loan. Reclassifications Due to the early adoption of ASU 2016-09 on January 1, 2016, reclassifications were made to the financing section of the consolidated statements of cash flows to reflect employee taxes paid to a tax authority to satisfy the employer's statutory income tax withholding obligation in relation to the exercise of stock awards. Prior period amounts have been reclassified to conform to the current presentation. Consolidation of Variable Interest Entities The determination of whether to consolidate a variable interest entity (“VIE”) in which we have a variable interest requires a significant amount of analysis and judgment whether we are the primary beneficiary of a VIE via a controlling financial interest in the VIE. A controlling financial interest in a VIE exists if we have both the power to direct the VIE’s activities that most significantly affect the VIE’s economic performance and a potentially significant economic interest in the VIE. The determination of whether an entity is a VIE considers factors, such as (i) whether the entity’s equity investment at risk is insufficient to allow the entity to finance its activities without additional subordinated financial support or (ii) when a holder’s equity investment at risk lacks any of the following characteristics of a controlling financial interest: the direct or indirect ability through voting rights or similar rights to make decisions about a legal entity’s activities that have a significant effect on the entity’s success, the obligation to absorb the expected losses of the entity or the right to receive the expected residual returns of the legal entity. As a result of the nature of the retained servicing rights on the sale of Borrower Loans, we are a variable interest holder in certain special purposes entities that purchase these Borrower Loans. For all of these entities we either do not have the power to direct the activities that most significantly affect the VIE’s economic performance or we do not have a potentially significant economic interest in the VIE. In no case are we the primary beneficiary, therefore, we do not consolidate these entities. Management regularly reviews and reconsiders its previous conclusions regarding the status of an entity as a VIE and whether we are required to consolidate such VIE in the consolidated financial statements. 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, US treasury securities and US agency securities. Cash equivalents are recorded at cost, which approximates fair value. 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 has on our 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 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. Available for Sale Investments Available for sale securities consist of commercial paper with terms longer than three months, US treasury securities, US agency securities and corporate debt securities. 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 are 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, 2016 and December 31, 2015. Fair Value Measurement Prosper measures the fair value of assets and liabilities in accordance with its fair value hierarchy which prioritizes information used to measure fair value and the effect of fair value measurements on earnings and provides for enhanced disclosures determined by the level within the hierarchy of information used in the valuation. We apply this framework whenever other standards require (or permit) assets or liabilities to be measured at fair value. We define fair value in terms of the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The price used to measure the fair value is not adjusted for transaction costs. The fair value measurement also assumes that the transaction to sell an asset occurs in the principal market for the asset or, in the absence of a principal market, the most advantageous market for the asset. The principal market is the market in which the reporting entity would sell or transfer the asset with the greatest volume and level of activity for the asset. In determining the principal market for an asset or liability, it is assumed that the reporting entity has access to the market as of the measurement date. If no market for the asset exists or if the reporting entity does not have access to the principal market, the reporting entity should use a hypothetical market. Assets and liabilities carried at fair value on the balance sheets are classified among three levels based on the observability of the inputs used to determine fair value: Level 1 — The valuation is based on quoted prices in active markets for identical instruments. Level 2 — The valuation is based on observable inputs such as quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation methodologies for which all significant assumptions are observable in the market. Level 3 — The valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the instrument. Level 3 valuations are typically performed using pricing models, discounted cash flow methodologies, or similar methodologies, which incorporate management’s own estimates of assumptions that market participants would use in pricing the instrument or valuations that require significant management judgment or estimation. Fair values of assets or liabilities are determined based on the fair value hierarchy, which requires an entity to maximize the use of quoted prices and observable inputs and to minimize the use of unobservable inputs when measuring fair value. Various valuation methodologies are utilized, depending on the nature of the financial instrument, including the use of market prices for identical or similar instruments, or discounted cash flow models. When possible, active and observable market data for identical or similar financial instruments are utilized. Alternatively, fair value is determined using assumptions that management believes a market participant would use in pricing the asset or liability. Financial instruments consist principally of Cash and Cash Equivalents, Restricted Cash, Available for Sale Investments, Borrower Loans, Loans Held for Sale, Accounts Receivable, Accounts Payable and Accrued Liabilities, Payable to Investors, Convertible Preferred Stock Warrant Liability and Notes. Servicing Assets and Liabilities are also subject to fair value measurement within the financial statements of Prosper. The estimated fair values of Cash and Cash Equivalents, Restricted Cash, Accounts Receivable, Accounts Payable and Accrued Liabilities, and Payable to Investors approximate their carrying values because of their short term nature. As observable market prices are not available for the Borrower Loans, Loans Held for Sale and Notes, or for similar assets and liabilities, Prosper believes the Borrower Loans, Loans Held for Sale and Notes should be considered Level 3 financial instruments. In a hypothetical transaction as of the measurement date, Prosper believes that differences in the principal marketplace in which the Borrower Loans are originated and the principal marketplace in which Prosper might offer those loans may result in differences between the originated amount of the loans and their fair value as of the transaction date. For Borrower Loans and Loans Held for Sale, the fair value is estimated using discounted cash flow methodologies based upon valuation assumptions including prepayment speeds, default rates and discount rates based on the perceived credit risk within each credit grade. 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% 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. See Note 4 for a roll-forward and further discussion of the significant assumptions used to value Borrower Loans and Notes. 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 measured at its fair value, which is determined based on the remaining contractual lease rentals reduced by estimated sublease rentals. Borrower Loans and Notes Through the Note Channel, Prosper purchases Borrower Loans from WebBank then issues Notes, and holds the Borrower Loans until maturity. The obligation to repay a series of Notes originated through the Note Channel is dependent upon the repayment of the associated Borrower Loan. Borrower Loans and Notes originated through the Note Channel are carried on Prosper’s consolidated balance sheets as assets and liabilities, respectively. We choose to measure certain financial instruments and certain other items at fair value on an instrument-by-instrument basis with unrealized gains and losses on items for which the fair value option has been elected reported in earnings. Management believes that the fair value option is more meaningful for the readers of the financial statements and it allows both the Borrower Loans and Notes to be valued using the same methodology. The fair value election, with respect to an item, may not be revoked once an election is made. Prosper estimates the fair value of such Borrower Loans and Notes using discounted cash flow methodologies adjusted for the expected prepayment, loss, recovery and default rates. The Borrower Loans are not derecognized when a corresponding Note is issued as Prosper maintains the ability to sell the Borrower Loans without the approval of the holders of the corresponding Notes. 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” revenue. The gain or loss on a loan sale is recorded in “Gain on Sale” 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. On January 1, 2015, Prosper elected to adopt the fair value method to measure the servicing assets and liabilities for all classes of servicing assets and liabilities subsequent to initial recognition. Management believes that the fair value option is more meaningful for readers of the financial statements as it more accurately reflects the expected benefits and obligations of the servicing rights. The adoption of the fair value method for a particular class is irrevocable. Prior to January 1, 2015, Prosper measured the servicing assets and liabilities using the amortized cost method. This change resulted in a $574 thousand decrease to accumulated deficit, a $545 thousand increase in net servicing assets and a $29 thousand decrease in net servicing liabilities. 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, estimated market servicing rates to service such loans, prepayment rates, default rates and the current principal balances of the Borrower Loans. Loans Held for Sale Loans Held for Sale are comprised of Borrower Loans held for short durations and are recorded at fair value. The fair value is estimated using discounted cash flow methodologies based upon a set of valuation assumptions similar to those of other Borrower Loans. We measure Loans Held for Sale at fair value on an instrument-by-instrument basis with unrealized gains and losses on items for which the fair value option has been elected reported in earnings. Management believes that the fair value option is more meaningful for the readers of the financial statements and it allows for the Loans Held for Sale to be measured at fair value similar to Borrower Loans and Notes. The fair value election, with respect to an item, may not be revoked once an election is made. 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 are stated at cost, less accumulated depreciation and amortization, and are 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, preliminary development efforts are successfully completed, and 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. 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. Our annual impairment testing date is 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 our operations could result in impairment. We did not recognize any goodwill impairments during the years ended December 31, 2016 and 2015. 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 to ten year periods. The technology and brand name intangible assets are amortized on a straight line basis over three to five years and one year, respectively. Prosper values the customer relationships, technology and brand name assets using the income approach. Significant assumptions in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired users, acquired technology, and brand names from a market participant perspective, useful lives and discount rates. Business Combinations We allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant assumptions in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired users, acquired technology, and brand names from a market participant perspective, useful lives and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which is one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the fair value, whichever comes first, any subsequent adjustments are recorded to earnings. The measurement period has closed for all acquisitions. Payable to Investors Payable to investors primarily represents our obligation to investors related to cash held in an account for the benefit of investors and payments-in-process received from borrowers. Convertible Redeemable Preferred Stock Warrant Liabilities Freestanding warrants to acquire shares that may be redeemable are accounted for in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480, Distinguishing Liabilities from Equity "ASC" 480" ) . Under ASC 480, 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 initially measured 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 a component of other expense, net, 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. Repurchase Liability for Unvested Restricted Stock Awards Under the terms of PMI’s equity plans, at the Administrator’s discretion, certain equity awards issued to employees may be exercised before they have vested. When this occurs Prosper records a liability for the unvested portion of the exercised option. If the employee’s employment is terminated before all of the shares become vested PMI may repurchase the unvested shares at the original exercise price. The liability is released into equity as the shares become vested. Early exercises of options are not deemed to be substantive exercises for accounting purpose and are excluded from the basic earnings per share calculation and treated as unexercised options shares for stock compensation purposes. Loan Trailing Fee 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 are 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 Change in Fair Value of Borrower Loans, Loans Held for Sale and Notes, 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 and net interest income earned. Fees include transaction fees for our services performed on behalf of WebBank to originate a loan and servicing fees paid by investors. We also have other smaller sources of revenue reported as other revenue, this includes referral fees, securitization fees and subscription fees. Transaction Fees Prosper earns a transaction fee upon the successful origination of all Borrower Loans facilitated through Prosper’s marketplace. Prosper receives payments from WebBank as compensation for the activities Prosper performs on behalf of WebBank. 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 such 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. Historically the servicing fee was set at 1.0% per annum and was increased to 1.075% per annum in August 2016 for loans originated after July 2016. The servicing fee compensates Prosper for the costs incurred in servicing the Borrower Loan, including managing payments from borrowers, 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 is retained for the servicing of Borrower Loans by WebBank. Additionally, Prosper recognizes gains or losses on the sale of Borrower Loans when it sells Borrower Loans to third parties. Gains or losses on sales of Borrower Loans that are recognized at the time of sale and are determined by the difference between the net sales proceeds, fair value of any servicing rights retained and the carrying value of the Borrower Loans sold. Interest Income on Borrower Loans, and Interest Expense on Notes 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. 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 $48.1 million , $60.1 million and 24.1 million for the years ended December 31, 2016 , 2015 and 2014 , respectively. Stock -Based Compensation We determine the fair value of our 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 our common stock, as well as changes in assumptions that include, but are not limited to, |
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 PFL and its wholly-owned subsidiary PAH. All intercompany balances and transactions between PFL 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 accounting principles generally accepted in the United States 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, repurchase and indemnification obligation, 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 from those estimates. Certain Risks In the normal course of its business, Prosper encounters significant credit risk. Financial instruments that potentially subject Prosper Funding to significant credit risk consist primarily of cash, cash equivalents, borrower loans held and restricted cash. Prosper Funding places cash, cash equivalents and restricted cash with high-quality financial institutions and is exposed to credit risk in the event of default by these institutions to the extent the amount recorded on the balance sheet exceeds federally insured amounts. Prosper Funding also performs periodic evaluations of the relative credit standing of these financial institutions and has not recognized any losses in earnings from instruments held at these financial institutions. As a lending marketplace, Prosper Funding believes its customers are highly susceptible to uncertainties and negative trends, real or perceived, in the markets driven by, among other factors, general economic conditions in the United States and abroad. These external economic conditions and resulting trends or uncertainties could adversely impact its customers’ ability or desire to participate on its marketplace as borrowers or investors, and consequently could negatively affect its business and results of operations. To the extent that Borrower Loan (including Borrower Loans that have been sold) payments are not made, servicing income will be reduced. A group of Notes corresponding to a particular Borrower Loan is wholly dependent on the repayment of such Borrower Loan. As a result, Prosper Funding does not bear the credit risk on such Borrower Loan. Consolidation of Variable Interest Entities The determination of whether to consolidate a variable interest entity (“VIE”) in which we have a variable interest requires a significant amount of analysis and judgment whether we are the primary beneficiary of a VIE via a controlling financial interest in the VIE. A controlling financial interest in a VIE exists if we have both the power to direct the VIE’s activities that most significantly affect the VIE’s economic performance and a potentially significant economic interest in the VIE. The determination of whether an entity is a VIE considers factors, such as (i) whether the entity’s equity investment at risk is insufficient to allow the entity to finance its activities without additional subordinated financial support or (ii) when a holder’s equity investment at risk lacks any of the following characteristics of a controlling financial interest: the direct or indirect ability through voting rights or similar rights to make decisions about a legal entity’s activities that have a significant effect on the entity’s success, the obligation to absorb the expected losses of the entity or the right to receive the expected residual returns of the legal entity. As a result of the nature of the retained servicing rights on the sale of Borrower Loans, we are a variable interest holder in certain special purposes entities that purchase these Borrower Loans. For all of these entities we either do not have the power to direct the activities that most significantly affect the VIE’s economic performance or we do not have a potentially significant economic interest in the VIE. In no case are we the primary beneficiary, therefore, we do not consolidate these entities. . Management regularly reviews and reconsiders its previous conclusions regarding the status of an entity as a VIE and whether we are required to consolidate such VIE in the consolidated financial statements. 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, US treasury securities and US 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 held as collateral as required for loan funding and servicing activities, and cash that investors or Prosper Funding has on the platform 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. Fair Value Measurement Prosper Funding measures the fair value of assets and liabilities in accordance with its fair value hierarchy which prioritizes information used to measure fair value and the effect of fair value measurements on earnings and provides for enhanced disclosures determined by the level within the hierarchy of information used in the valuation. We apply this framework whenever other standards require (or permit) assets or liabilities to be measured at fair value. We define fair value in terms of the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The price used to measure the fair value is not adjusted for transaction costs. Under ASC Topic 820, the fair value measurement also assumes that the transaction to sell an asset occurs in the principal market for the asset or, in the absence of a principal market, the most advantageous market for the asset. The principal market is the market in which the reporting entity would sell or transfer the asset with the greatest volume and level of activity for the asset. In determining the principal market for an asset or liability under ASC Topic 820, it is assumed that the reporting entity has access to the market as of the measurement date. If no market for the asset exists or if the reporting entity does not have access to the principal market, the reporting entity should use a hypothetical market. Under ASC Topic 820, assets and liabilities carried at fair value on the balance sheets are classified among three levels based on the observability of the inputs used to determine fair value: Level 1 — The valuation is based on quoted prices in active markets for identical instruments. Level 2 — The valuation is based on observable inputs such as quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation methodologies for which all significant assumptions are observable in the market. Level 3 — The valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the instrument. Level 3 valuations are typically performed using pricing models, discounted cash flow methodologies, or similar methodologies, which incorporate management’s own estimates of assumptions that market participants would use in pricing the instrument or valuations that require significant management judgment or estimation. Fair values of assets or liabilities are determined based on the fair value hierarchy established in ASC Topic 820, which requires an entity to maximize the use of quoted prices and observable inputs and to minimize the use of unobservable inputs when measuring fair value. Various valuation methodologies are utilized, depending on the nature of the financial instrument, including the use of market prices for identical or similar instruments, or discounted cash flow models. When possible, active and observable market data for identical or similar financial instruments are utilized. Alternatively, fair value is determined using assumptions that management believes a market participant would use in pricing the asset or liability. Financial instruments consist principally of cash and cash equivalents, restricted cash, Borrower Loans, accounts payable and accrued liabilities, and Notes. Servicing assets and liabilities are also subject to fair value measurement within the financial statements of PFL. The estimated fair values of cash and cash equivalents, restricted cash, accounts payable and accrued liabilities approximate their carrying values because of their short term nature. As observable market prices are not available for the Borrower Loans, Loans Held for Sale and Notes, Prosper Funding believes the Borrower Loans, Loans Held for Sale and Notes should be considered Level 3 financial instruments under ASC Topic 820. In a hypothetical transaction as of the measurement date, Prosper Funding believes that differences in the principal marketplace in which the Borrower Loans are originated and the principal marketplace in which Prosper Funding might offer those loans may result in differences between the originated amount of the loans and their fair value as of the transaction date. For Borrower Loans and Loans Held for Sale, the fair value is estimated using discounted cash flow methodologies based upon valuation assumptions including prepayment speeds, default rates and discount rates based on the perceived credit risk within each credit grade. The obligation to pay principal and interest on any Note 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 lenders that are dependent upon borrower payments. As such, the fair value of a group 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 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 of 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. See Note 4 for a roll-forward and further discussion of the significant assumptions used to value Borrower Loans and Notes. Borrower Loans and Notes Through the Note Channel, Prosper Funding purchases Borrower Loans from WebBank then issues Notes 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 Loan. Borrower Loans originated and Notes issued through the Note Channel are carried on Prosper Funding’s consolidated balance sheets as assets and liabilities, respectively. Prosper Funding has adopted the provisions of ASC Topic 825, Financial Instruments ( “ASC Topic 825” ). ASC Topic 825 permits companies to choose to measure certain financial instruments and certain other items at fair value on an instrument-by-instrument basis with unrealized gains and losses on items for which the fair value option has been elected reported in earnings. Management believes that the fair value option is more meaningful for the readers of the financial statements and it allows both the Borrower Loans and Notes to be valued using the same methodology. The fair value election, with respect to an item, may not be revoked once an election is made. Prosper Funding estimates the fair value of such Borrower Loans and Notes using discounted cash flow methodologies adjusted for the expected payment, loss, recovery and default rates. The Borrower Loans are not derecognized when a corresponding Note is issued as Prosper Funding maintains the ability to sell the Borrower Loans without the approval of the holders in the corresponding Notes. 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 “Servicing Fees” revenue. 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 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. On January 1, 2015, Prosper elected to adopt the fair value method to measure the servicing assets and liabilities for all classes of servicing assets and liabilities subsequent to initial recognition. ASC Subtopic 860-50, Servicing Assets and Liabilities, allows the adoption of the fair value method at the beginning of any fiscal year. The adoption of the fair value method for a particular class is irrevocable. Prior to January 1, 2015, Prosper measured the servicing assets and liabilities using the amortized cost method. This change resulted in a $428 thousand decrease to accumulated deficit, a $399 thousand increase in net servicing assets and a $29 thousand decrease in net servicing liabilities. 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. Loans Held for Sale Loans Held for Sale are comprised of Borrower Loans held for short durations and are recorded at fair value. The fair value is estimated using discounted cash flow methodologies based upon a set of valuation assumptions similar to those of other Borrower Loans. We measure Loans Held for Sale at fair value on an instrument-by-instrument basis with unrealized gains and losses on items for which the fair value option has been elected reported in earnings. Management believes that the fair value option is more meaningful for the readers of the financial statements and it allows for the Loans Held for Sale to be measured at fair value similar to Borrower Loans and Notes. The fair value election, with respect to an item, may not be revoked once an election is made. Software and Website Development Software and Website Development represents the software and website that PMI has transferred to Prosper Funding. Prosper Funding does not develop any of its own software or website. Software and website are included in property and equipment and amortized to expense using the straight-line method over their expected lives which is generally one to five years. Prosper Funding evaluates its software assets 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 to the future net undiscounted cash flows expected to be generated by the asset. 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. Payable to Investors Payable to Investors primarily represents our 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 On July 1, 2016, Prosper Funding 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 Funding. These agreements are 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 Funding, and gives WebBank an ongoing financial interest in the performance of the loans it originates. This fee is paid by Prosper Funding 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 Funding 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 Funding 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 Change in Fair Value of Borrower Loans, Loans Held for Sale and Notes, Net on the 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. We also have other smaller sources of revenue reported as other revenue, which includes 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 through the Whole Loan Channel typically pay Prosper Funding 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 Funding for the costs incurred in servicing the related loan, including managing payments from borrowers, payments to investors and maintaining investors’ account portfolios. Prosper Funding records servicing fees paid by Borrower Loan investors as a component of operating revenue when received. Gain on Sale of Borrower Loans Prosper Funding recognizes gains or losses on the sale of Borrower Loans when it is retained for the servicing of Borrower Loans by WebBank. Additionally, Prosper Funding recognizes gains or losses on the sale of Borrower Loans when it sells Borrower Loans to third parties. Gains or losses on sales of Borrower Loans that are recognized at the time of sale and are determined by the difference between the net sales proceeds, fair value of any servicing rights retained and the carrying value of the Borrower Loans sold. 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 an 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. Other Expense Other expense, net includes contract termination costs that are expected to be non-recurring and not part of restructuring activities. Comprehensive Income There is no comprehensive income (loss) other than the net income (loss) disclosed in the consolidated statements of operations. Recent Accounting Pronouncements In May 2014, as part of its ongoing efforts to assist in the convergence of US GAAP and International Financial Reporting Standards (“IFRS”), the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-9, “ Revenue from Contracts with Customers .” The new guidance sets forth a new five-step revenue recognition model which replaces the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically existed in U.S. GAAP. The underlying principle of the new standard is that a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects in exchange for the goods or services. The standard also requires more detailed disclosures and provides additional guidance for transactions that were not addressed completely in the prior accounting guidance. The standard will be effective for Prosper Funding in the first quarter of fiscal 2018. In August 2015, the FASB issued ASU No. 2015-14, which amended the standard to provide a one-year deferral of the effective date, as well as providing the option to early adopt the standard on the original effective date. Accordingly, Prosper Funding may adopt the standard in either Prosper Funding’s fiscal year ending December 31, 2017 or 2018. The guidance can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. Prosper Funding expects to adopt this ASU on a modified retrospective basis in the first quarter of fiscal 2018. Our evaluation of this ASU is ongoing and not complete. The FASB has issued and may issue in the future, interpretative guidance, which may cause our evaluation to change. Our preliminary results indicate that administration fees are included in the scope of the new guidance, while servicing fees and gain or loss on the sale of loans remain within the scope of ASC topic 860, Transfers and Servicing . While we anticipate some changes to revenue recognition for certain customer contracts, Prosper Funding does not currently believe that this ASU will have a material effect on our Consolidated Financial Statements. In November 2014, the FASB issued ASU 2014-16, Derivatives and Hedging (Topic 815): Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity to eliminate the use of different methods in practice and thereby reduce existing diversity in the accounting for hybrid financial instruments issued in the form of a share. For hybrid financial instruments issued in the form of a share, an entity should determine the nature of the contract by considering the economic characteristics and risks of the entire hybrid financial instrument. The existence or omission of any single term or feature does not necessarily determine the economic characteristics and risks of the host contract. This standard will be effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. Prosper Funding adopted this guidance on January 1, 2016, and the adoption of this standard did not have a material impact on Prosper Funding’s financial statements. In February 2015, the FASB issued ASU 2015-2, " Consolidation (Topic 810): Amendments to the Consolidation Analysis. " ASU 2015-2 affects reporting entities that are required to evaluate whether they should consolidate certain legal entities. ASU 2015-2 is effective for periods beginning after December 15, 2015 with early adoption permitted. Prosper Funding has decided to early adopt this guidance effective January 1, 2015, and the adoption of this standard had no impact on Prosper Funding’s consolidated financial statements. In April 2015, the FASB issued ASU 2015-5 “ Customers’ Accounting for Fees Paid in Cloud Computing Arrangement ”, which will be effective for the annual reporting period beginning after December 15, 2015. The guidance changes what a customer must consider in determining whether a cloud computing arrangement contains a software license. If the arrangement contains a software license, the customer would account for the fees related to the software license element in accordance with guidance related to internal use software; if the arrangement does not contain a software license, the customer would account for the arrangement as a service contract. Prosper Funding is currently assessing the potential impact on its consolidated financial statements from adopting this new guidance. In January 2016, the FASB issued ASU 2016-1, " Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities" , which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. This guidance will be effective for us in the first quarter of our fiscal year 2019, and early adoption is not permitted. Prosper Funding is currently evaluating the impact that this guidance will have on our consolidated financial statements. In August 2016, the FASB issued A SU 2016-15 , “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. ” The standard provides guidance for eight targeted changes with respect to how cash receipts and cash payments are classified in the statements of cash flows, with the objective of reducing diversity in practice. This guidance will be effective for Prosper in the first quarter of our fiscal year 2018, and early adoption is permitted. Prosper Funding is currently evaluating the impacts the adoption of this accounting standard will have on Prosper Funding's cash flows. In November 2016, the FASB issued ASU 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash (ASU 2016-18)" , which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This guidance will be effective for us in the first quarter of 2018 and early adoption is permitted. Prosper Funding is currently evaluating the effect that this guidance will have on our consolidated financial statements and related disclosures. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2016 | |
Entity Information [Line Items] | |
Property and Equipment, Net | Property and Equipment, Net Property and equipment consist of the following (in thousands): December 31, 2016 2015 Property and equipment: Computer equipment $ 14,107 $ 10,522 Internal-use software and website development costs 16,750 10,990 Office equipment and furniture 3,010 2,442 Leasehold improvements 7,038 5,719 Assets not yet placed in service 1,222 3,242 Property and equipment 42,127 32,915 Less accumulated depreciation and amortization (17,274 ) (7,950 ) Total property and equipment, net $ 24,853 $ 24,965 Depreciation and amortization expense for property and equipment for 2016 , 2015 and 2014 was $9,381 thousand , $6,080 thousand and 2,097 thousand , respectively. Prosper capitalized internal-use software and website development costs in the amount of $6,251 thousand , $7,348 thousand and $846 thousand for the years ended December 31, 2016 , 2015 and 2014 , respectively. Prosper recorded impairment charges of $1,083 thousand, $0 thousand and $322 thousand for the years ended December 31, 2016 , 2015 and 2014 respectively, as a result of our decision to discontinue several software and website development projects and to cease the use of certain leased properties and related leasehold improvements, computer equipment and furniture at these locations. |
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, 2016 2015 Property and equipment: Internal-use software and web site development costs $ 16,749 $ 10,990 Property and equipment 16,749 10,990 Less accumulated depreciation and amortization (6,654 ) (2,571 ) Total property and equipment, net $ 10,095 $ 8,419 Depreciation and amortization expense for 2016 and 2015 was $4,083 thousand and $3,161 thousand , respectively. Internal-use software and web site development additions of $5.8 million and $10.5 million were purchased from PMI in the years ended December 31, 2016 and 2015 respectively. |
Borrower Loans, Loans Held for
Borrower Loans, Loans Held for Sale, and Notes Held at Fair Value | 12 Months Ended |
Dec. 31, 2016 | |
Entity Information [Line Items] | |
Borrower Loans, Loans Held for Sale, and Notes Held at Fair Value | Borrower Loans, Loans Held for Sale, and Notes Held 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 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 a series of Notes will be less than the interest rate earned on the corresponding Borrower Loan due to the servicing fee. At December 31, 2016 and 2015 , Borrower Loans, Notes and Loans Held for Sale (in thousands) were: Borrower Loans Notes Loans Held for Sale December 31, 2016 December 31, 2015 December 31, 2016 December 31, 2015 December 31, 2016 December 31, 2015 Aggregate principal balance outstanding $ 319,143 $ 296,945 $ (323,358 ) $ (294,331 ) $ 641 $ 42 Fair value adjustments (3,516 ) 328 7,122 (3,074 ) (17 ) (10 ) Fair value $ 315,627 $ 297,273 $ (316,236 ) $ (297,405 ) $ 624 $ 32 At December 31, 2016 , outstanding Borrower Loans had original maturities between 36 and 60 months , had monthly payments with fixed interest rates ranging from 5.32% to 33.04% and had various maturity dates through December 2021 . At December 31, 2015, Loans Held for Sale and Borrower Loans had original terms between 36 months and 60 months , had monthly payments with fixed interest rates ranging from 5.32% to 33.04% and had various maturity dates through December 2020 . Within the change in fair value of Borrower Loans, Prosper recorded a loss of approximately $2.4 million that is attributable to changes in the credit risks related to Borrower Loans during the year ending December 31, 2016. As of December 31, 2016 the Borrower Loans that were 90 days or more delinquent, had an aggregate principal amount of $3.2 million and a fair value of $1.0 million . As of December 31, 2015 the Borrower Loans that were 90 days or more delinquent, had an aggregate principal amount of $2.3 million and a fair value of $0.9 million . We place loans on non-accrual status when they are over 120 days due. As of December 31, 2016 and 2015 , Borrower Loans in non-accrual status had a fair value of $0.5 million and $0.1 million , respectively. |
Prosper Funding LLC | |
Entity Information [Line Items] | |
Borrower Loans, Loans Held for Sale, and Notes Held at Fair Value | Borrower Loans, Loans Held For Sale and Notes Held 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 derived from historical performance, market conditions and discount rates applied to each credit grade based on the perceived credit risk. 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 a series of Notes will be less than the interest rate earned on the corresponding Borrower Loan due to the servicing fee. At December 31, 2016 and 2015 , Borrower Loans, Notes and Loans Held for Sale (in thousands) were: Borrower Loans Notes Loans Held for Sale December 31, 2016 December 31, 2015 December 31, 2016 December 31, 2015 December 31, 2016 December 31, 2015 Aggregate principal balance outstanding $ 319,143 $ 296,945 $ (323,358 ) $ (294,331 ) $ 641 $ 42 Fair value adjustments (3,516 ) 328 7,122 (3,074 ) (17 ) (10 ) Fair value $ 315,627 $ 297,273 $ (316,236 ) $ (297,405 ) $ 624 $ 32 At December 31, 2016 , outstanding Borrower Loans had original maturities between 36 and 60 months , had monthly payments with fixed interest rates ranging from 5.32% to 33.04% and had various maturity dates through December 2021 . At December 31, 2015, Borrower Loans and Loans Held for Sale had original terms between 36 months and 60 months , had monthly payments with fixed interest rates ranging from 5.32% to 33.04% and had various maturity dates through December 2020 . Within the change in fair value of Borrower Loans, Prosper Funding recorded a loss of approximately $2.4 million that is attributable to changes in the credit risks related to Borrower Loans during the year ending December 31, 2016. As of December 31, 2016 the Borrower Loans that were 90 days or more delinquent, had an aggregate principal amount of $3.2 million and a fair value of $1.0 million . As December 31, 2015 the Borrower Loans that were 90 days or more delinquent, had an aggregate principal amount of $2.3 million and a fair value of $0.9 million . As of December 31, 2016 and 2015 , Borrower Loans in non-accrual status had a fair value of $0.5 million and $0.1 million , respectively. |
Loan Servicing Assets and Liabi
Loan Servicing Assets and Liabilities | 12 Months Ended |
Dec. 31, 2016 | |
Entity Information [Line Items] | |
Loan Servicing Assets and Liabilities | Loan Servicing Assets and Liabilities Prosper initially records servicing assets and liabilities at their estimated fair values when Prosper sells Borrower Loans in their entirety to unrelated third-party buyers. During 2014, the initial fair value of such servicing assets or liabilities was amortized in proportion to the estimated servicing income or loss and was amortized over the period of servicing income or loss. The total gains recognized on the sale of such Borrower Loans were $3.6 million and $14.2 million and $4.0 million for the years ended December 31, 2016 and 2015 and 2014 respectively. For the years ended December 31, 2016 and 2015, servicing assets and liabilities were measured at fair value subsequent to the initial recognition. For the year ended December 31, 2014 , no impairment was recorded. At December 31, 2016 , Borrower Loans that were sold to unrelated third parties, but for which we retained servicing rights had a total outstanding principal balance of $3.5 billion , original terms of either 36 or 60 months and had monthly payments with fixed interest rates ranging from 5.32% to 35.52% and maturity dates through December 2021 . At December 31, 2015 , Borrower Loans that were sold but for which we retained servicing rights had a total outstanding principal balance of $3.8 billion , original terms between 36 and 60 months and had monthly payments with fixed interest rates ranging from 5.32% to 31.90% and maturity dates through December 2020 . $38.9 million , $22.1 million and $5.3 million of contractually specified servicing fees, late charges and ancillary fees are included on our Statement of Operations in Servicing Fees, Net for the years ended December 31, 2016 , 2015 and 2014 , 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 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 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 – Prosper 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 estimated these market servicing rates based on observable market rates for other loan types in the industry and bids from subservicing providers, adjusted for the unique loan attributes that are present in the specific loans that Prosper sells and services and information from a backup service provider. 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. We 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’s servicing assets. Default Rate – The default rate presented in Note 7 is an annualized, average estimate considering all Borrower Loan categories (i.e. Prosper 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. Prosper 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 we expect 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 initially records servicing assets and liabilities at their estimated fair values when Prosper Funding sells whole loans to unrelated third-party buyers. The initial fair value of such servicing assets or liabilities is amortized in proportion to the estimated servicing income or loss and is amortized over the period of servicing income or loss. The total gains recognized on the sale of the whole loans were $3.6 million and $14.2 million for the years ended December 31, 2016 and 2015 , respectively. For the year ended December 31, 2016 , servicing assets and liabilities were measured at fair value subsequent to the initial recognition. At December 31, 2016 , loans that were sold but for which we retained servicing rights had a total outstanding principal balance of $3.4 billion , original terms of either 36 or 60 months and had monthly payments with fixed interest rates ranging from 5.32% to 35.52% and maturity dates through December 2020 . At December 31, 2015 , loans that were sold but for which we retained servicing rights had a total outstanding principal balance of $3.6 billion , original terms between 36 and 60 months and had monthly payments with fixed interest rates ranging from 5.32% to 31.90% and Maturity dates through December 2019 . $38.2 million and $20.4 million of contractually specified servicing fees, late charges and ancillary fees are included on our Statement of Operations in Servicing Fees, Net for the years ended December 31, 2016 and 2015 , respectively. Fair value Valuation method – Discounted cash flow valuation methodology generally consist 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 presented below within Note 6 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 estimated these market servicing rates based on observable market rates for other loan types in the industry and bids from subservicing 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 provider. 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. We 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 6 is an annualized, average estimate considering all loan categories (i.e. Prosper ratings and duration), and represents an aggregate of conditional default rate curves for each credit grade or loan category. Each point on a particular loan category’s curve represents the percentage of principal expected to default per period based on the term and age of the underlying 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 6 is an annualized, average estimate considering all Borrower Loan categories (i.e. Prosper 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 we expect 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, 2016 | |
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' Deficit unless management determines that an investment is OTTI. The amortized cost, gross unrealized gains and losses, and fair value of available for sale investments as of December 31, 2016 and December 31, 2015 , are as follows (in thousands): December 31, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Fixed maturity securities: Corporate debt securities $ 21,762 $ 1 $ (10 ) $ 21,753 US Treasury securities 8,516 3 (3 ) 8,516 Agency bonds 2,499 1 — 2,500 Total Available for Sale Investments $ 32,777 $ 5 $ (13 ) $ 32,769 December 31, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Fixed maturity securities: Corporate debt securities $ 50,327 $ 1 $ (94 ) $ 50,234 Commercial paper 9,493 — — 9,493 US Treasury securities 8,512 — (41 ) 8,471 Agency bonds 2,499 — (8 ) 2,491 Total fixed maturity securities 70,831 1 (143 ) 70,689 Short term bond funds 2,500 — (2 ) 2,498 Total Available for Sale Investments $ 73,331 $ 1 $ (145 ) $ 73,187 A summary of available for sale investments with unrealized losses as of December 31, 2016 , aggregated by category and period of continuous unrealized loss, is as follows (in thousands): Less than 12 months 12 months or longer Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Fixed maturity securities: Corporate debt securities $ — $ — $ 14,651 $ (10 ) $ 14,651 $ (10 ) U.S. treasury securities — — 4,499 (3 ) 4,499 (3 ) Total Investments with Unrealized Losses $ — $ — $ 19,150 $ (13 ) $ 19,150 $ (13 ) The maturities of available for sale investments at December 31, 2016 , are as follows (in thousands): Within 1 year After 1 year through 5 years After 5 years to 10 years After 10 years Total Corporate debt securities 21,753 — — — 21,753 US Treasury securities 8,516 — — — 8,516 Agency bonds 2,500 — — — 2,500 Total Fair Value $ 32,769 $ — $ — $ — $ 32,769 Total Amortized Cost $ 32,777 $ — $ — $ — $ 32,777 Prosper sold investments in available for sale securities in the amount of $12.4 million during the year ended December 31, 2016 which resulted in a gain of $12 thousand . |
Fair Value of Assets and Liabil
Fair Value of Assets and Liabilities | 12 Months Ended |
Dec. 31, 2016 | |
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, 2016 . Financial Instruments Recorded at Fair Value The fair value of the Borrower Loans, Loans Held for Sale 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, Loans Held for Sale and Notes include default 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. The available for sale investments consist of corporate debt securities, US treasury securities and agency bonds. When available, Prosper uses quoted prices in active markets to measure the fair value of available for sale securities. 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 generally obtains prices from at least two independent pricing sources for assets recorded at fair value. 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. Prosper 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. Prosper 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 further details. The following tables present the fair value hierarchy for assets and liabilities measured at fair value (in thousands): December 31, 2016 Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Assets: Borrower Loans $ — $ — $ 315,627 $ 315,627 Loans Held for Sale — — 624 624 Available for Sale Investments, at Fair Value — 32,769 — 32,769 Servicing Assets — — 12,786 12,786 Total Assets — 32,769 329,037 361,806 Liabilities: Notes $ — $ — $ 316,236 $ 316,236 Servicing Liabilities — — 198 198 Convertible Preferred Stock Warrant Liability — — 21,711 21,711 Loan Trailing Fee Liability — — 665 665 Total Liabilities $ — $ — $ 338,810 $ 338,810 December 31, 2015 Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Assets: Borrower Loans $ — $ — $ 297,273 $ 297,273 Loans Held for Sale — — 32 32 Available for Sale Investments, at Fair Value — 73,187 — 73,187 Servicing Assets — — 14,363 14,363 Total Assets — 73,187 311,668 384,855 Liabilities: Notes $ — $ — $ 297,405 $ 297,405 Servicing Liabilities $ — $ — $ 484 $ 484 Contingent Consideration $ — $ — $ 4,801 $ 4,801 Total Liabilities $ — $ — $ 302,690 $ 302,690 As Prosper’s Borrower Loans, Loans Held for Sale, Notes, Servicing Assets, Servicing Liabilities and Loan Trailing Fee Liability, do not trade in an active market with readily observable prices, Prosper 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 significant unobservable inputs used for Prosper’s level 3 fair value measurements at December 31, 2016 : Borrower Loans, Loans Held for Sale and Notes: Range Unobservable Input December 31, 2016 December 31, 2015 Discount rate 4.0% - 15.9% 4.3% - 14.5% Default rate 1.7% - 14.9% 1.4% - 14.4% Servicing Assets and Liabilities: Range Unobservable Input December 31, 2016 December 31, 2015 Discount rate 15% - 25% 15% - 25% Default rate 1.5% - 15.2% 1.2% - 14.7% Prepayment rate 13.6% - 26.6% 14.3% - 25.6% 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, 2016 and 2015, the market rate for collection fees and non-sufficient fund fees was assumed to be 12 basis points and 8 basis points for a weighted-average total market servicing rate of 74.5 basis points and 70.5 basis points respectively. At December 31, 2016 and 2015, 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. The following tables present additional information about level 3 Borrower Loans, Loans Held for Sale and Notes measured at fair value on a recurring basis (in thousands): Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Borrower Loans Notes Loans Held for Sale Total Balance at January 1, 2016 $ 297,273 $ (297,405 ) $ 32 $ (100 ) Purchase of Borrower Loans/Issuance of Notes 217,582 (217,767 ) 1,979,952 $ 1,979,767 Principal repayments (171,195 ) 173,958 (447 ) $ 2,316 Borrower Loans sold to third parties (2,515 ) — (1,978,905 ) $ (1,981,420 ) Other changes 416 (591 ) (1 ) $ (176 ) Change in fair value (25,934 ) 25,569 (7 ) $ (372 ) Balance at December 31, 2016 $ 315,627 $ (316,236 ) $ 624 $ 15 Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Borrower Loans Notes Loans Held for Sale Total Balance at January 1, 2015 $ 273,243 $ (273,783 ) $ 8,463 $ 7,923 Purchase of Borrower Loans/Issuance of Notes 197,436 (197,228 ) 3,517,467 3,517,675 Principal repayments (151,038 ) 151,025 (552 ) (565 ) Borrower Loans sold to third parties (855 ) 813 (3,525,207 ) (3,525,249 ) Other changes 81 (6 ) (18 ) 57 Change in fair value (21,594 ) 21,774 (121 ) 59 Balance at December 31, 2015 $ 297,273 $ (297,405 ) $ 32 $ (100 ) The following table presents additional information about the Level 3 servicing assets and liabilities measured at fair value on a recurring basis (in thousands): Servicing Assets Servicing Liabilities Amortized Cost at January 1, 2015 $ 4,163 $ 624 Adjustments to adopt fair value measurement $ 545 $ (29 ) Fair Value at January 1, 2015 $ 4,708 $ 595 Additions 14,909 283 Less: Changes in fair value (5,254 ) (394 ) Fair Value at January 1, 2016 14,363 484 Additions 9,833 9 Less: Changes in fair value (11,410 ) (295 ) Fair Value at December 31, 2016 $ 12,786 $ 198 The following table presents additional information about level 3 Preferred Stock Warrant Liability measured at fair value on a recurring basis (in thousands): Balance at January 1, 2016 $ — Add Issuances of Preferred Stock Warrant 21,704 Change in fair value of the preferred stock warrant liability 7 Balance at December 31, 2016 $ 21,711 The following table presents additional information about level 3 Loan Trailing Fee Liability measured at fair value on a recurring basis (in thousands): Balance at January 1, 2016 $ — Issuances 647 Cash payment of Loan Trailing Fee (21 ) Change in fair value 39 Balance at December 31, 2016 $ 665 Contingent Consideration: On October 9, 2015 , PMI, purchased 100% of the outstanding shares of BillGuard. The contingent consideration was primarily performance-based and was to be determined over a one -year period from the date of purchase. Total contingent consideration was due in October 2016 was based on revenues generated and other criteria. Certain criteria were met that resulted in full payout of the contingent consideration. We measured the fair value of the contingent consideration using a probability-weighted discounted cash flow approach. Some of the significant inputs used for the valuation are not observable in the market and are thus Level 3 inputs. Contingent consideration is recorded in the consolidated balance sheet under "Other Liabilities." Significant increases or decreases in certain underlying assumptions used to value the contingent consideration could significantly increase or decrease the fair value estimates recorded in the Consolidated Balance Sheets. On October 9, 2015, the fair value of the contingent consideration was $3.8 million , during the year ended December 31, 2015 there were fair value changes of $1.0 million resulting in a fair value of $4.8 million at December 31, 2015. During the year ended December 31, 2016 there were fair value changes of $0.2 million that increased the fair value. The contingent consideration was paid in 2016 and at December 31, 2016 had a balance of $0 . Significant Recurring Level 3 Fair Value Asset and Liability Input Sensitivity Key economic assumptions and the sensitivity of the current fair value to immediate changes in those assumptions at December 31, 2016 for Borrower Loans, Loans Held for Sale and Notes originated through the Note Channel are presented in the following table (in thousands, except percentages): Borrower Loans / Loans Held for Sale Notes Discount rate assumption: 7.30 % * 7.30 % * Resulting fair value from: 100 basis point increase $ 312,424 $ 313,022 200 basis point increase 309,302 309,888 Resulting fair value from: 100 basis point decrease $ 318,913 $ 319,535 200 basis point decrease 322,288 322,921 Default rate assumption: 11.94 % * 11.94 % * Resulting fair value from: 100 basis point increase $ 312,171 $ 312,759 200 basis point increase 308,833 309,401 Resulting fair value from: 100 basis point decrease $ 319,112 $ 319,743 200 basis point decrease 322,640 323,294 * Represents weighted average assumptions considering all credit grades. The following table presents the estimated impact on Prosper’s estimated fair value of servicing assets and liabilities, calculated using different market servicing rates and different default rates as of December 31, 2016 (in thousands, except percentages). Servicing Assets Servicing Liabilities Weighted average market servicing rate assumptions 0.625 % 0.625 % Resulting fair value from: Market servicing rate increase to 0.65% $ 11,918 $ 217 Market servicing rate decrease to 0.60% $ 13,654 $ 177 Weighted average prepayment assumptions 20.02 % 20.02 % Resulting fair value from: Applying a 1.1 multiplier to prepayment rate $ 12,581 $ 194 Applying a 0.9 multiplier to prepayment rate $ 12,992 $ 201 Weighted average default assumptions 11.59 % 11.59 % Resulting fair value from: Applying a 1.1 multiplier to default rate $ 12,592 $ 198 Applying a 0.9 multiplier to default rate $ 12,984 $ 198 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. |
Prosper Funding LLC | |
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 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, 2016 . Financial Instruments Recorded at Fair Value The fair value of the Borrower Loans, Loans Held for Sale 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, Loans Held for Sale and Notes include default rates derived from historical performance and discount rates applied to each credit grade based on the perceived credit risk. Investments held at fair value consists of available for sale investments. The available for sale investments consist of corporate and government bonds. When available, Prosper Funding uses quoted prices in active markets to measure the fair value of securities available for sale. When utilizing market data and bid-ask spreads, Prosper Funding uses the price within the bid-ask spread that best represents fair value. When quoted prices do not exist, Prosper Funding uses prices obtained from independent third-party pricing services to measure the fair value of investment assets. Prosper Funding generally obtains prices from at least two independent pricing sources for assets recorded at fair value. Prosper Funding'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. Prosper Funding 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. Prosper Funding 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 following tables present the fair value hierarchy for assets and liabilities measured at fair value (in thousands): December 31, 2016 Level 1 Inputs Level 2 Inputs Level 3 Inputs Fair Value Assets Borrower Loans $ — $ — $ 315,627 $ 315,627 Servicing Assets — — 12,461 $ 12,461 Loans Held for Sale — — 624 624 Total Assets — — 328,712 328,712 Liabilities Notes $ — $ — $ 316,236 $ 316,236 Servicing Liabilities — — 198 198 Loan Trailing Fee Liability — — 665 665 Total Liabilities $ — $ — $ 317,099 $ 317,099 December 31, 2015 Level 1 Inputs Level 2 Inputs Level 3 Inputs Fair Value Assets Borrower Loans $ — $ — $ 297,273 $ 297,273 Servicing Assets — — 13,605 13,605 Loans Held for Sale — — 32 32 Total Assets — — 310,910 310,910 Liabilities Notes $ — $ — $ 297,405 $ 297,405 Servicing Liabilities — — 484 484 Total Liabilities $ — $ — $ 297,889 $ 297,889 As Prosper Funding’s Borrower Loans, Loans Held for Sale, Notes, Servicing Assets, Servicing Liabilities and Loan Trailing Fee Liability 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 significant unobservable inputs used for Prosper Funding’s level 3 fair value measurements at December 31, 2016 : Borrower Loans, Loans Held for Sale and Notes: Range Unobservable Input December 31, 2016 December 31, 2015 Discount rate 4.0% - 15.9% 4.3% - 14.5% Default rate 1.7% - 14.9% 1.4% - 14.4% Servicing Assets and Liabilities: Range Unobservable Input December 31, 2016 December 31, 2015 Discount rate 15% - 25% 15% - 25% Default rate 1.5% - 15.2% 1.2% - 14.7% Prepayment rate 13.6% - 26.6% 14.3% - 25.6% 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, 2016 and 2015, the market rate for collection fees and non-sufficient funds fees was assumed to be 12 basis points and 8 basis points for a weighted-average total market servicing rate of 74.5 basis points and 70.5 basis points respectively. At December 31, 2016 and 2015 , 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. The following tables present additional information about level 3 Borrower Loans, Loans Held for Sale and Notes measured at fair value on a recurring basis (in thousands): Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Borrower Loans Notes Loans Held for Sale Total Balance at January 1, 2016 $ 297,273 $ (297,405 ) $ 32 $ (100 ) Purchase of Borrower Loans/Issuance of Notes 217,582 (217,767 ) 1,979,952 1,979,767 Principal repayments (171,195 ) 173,958 (447 ) 2,316 Borrower loans sold to third parties (2,515 ) — (1,978,905 ) (1,981,420 ) Other changes 416 (591 ) (1 ) (176 ) Change in fair value (25,934 ) 25,569 (7 ) (372 ) Balance at December 31, 2016 $ 315,627 $ (316,236 ) $ 624 $ 15 Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Borrower Loans Notes Loans Held for Sale Total Balance at January 1, 2015 $ 273,243 $ (273,783 ) $ 8,463 $ 7,923 Purchase of Borrower Loans/Issuance of Notes 197,436 (197,228 ) 3,517,467 3,517,675 Principal repayments (151,038 ) 151,025 (552 ) (565 ) Borrower loans sold to third parties (855 ) 813 (3,525,207 ) (3,525,249 ) Other changes 81 (6 ) (18 ) 57 Change in fair value (21,594 ) 21,774 (121 ) 59 Balance at December 31, 2015 $ 297,273 $ (297,405 ) $ 32 $ (100 ) The following table presents additional information about level 3 servicing assets and liabilities measured at fair value on a recurring basis (in thousands): Servicing Assets Servicing Liabilities Amortized Cost at January 1, 2015 $ 3,116 $ 624 Adjustment to adopt fair value measurement 399 (29 ) Fair Value at January 1, 2015 $ 3,515 $ 595 Additions 14,909 283 Less: Transfers to PMI (249 ) — Less: Changes in fair value (4,570 ) (394 ) Fair Value at January 1, 2016 $ 13,605 $ 484 Additions 9,833 9 Less: Changes in fair value (10,977 ) (295 ) Fair Value at December 31, 2016 $ 12,461 $ 198 The following table presents additional information about level 3 Loan Trailing Fee Liability measured at fair value on a recurring basis (in thousands): Balance at January 1, 2016 $ — Issuances 647 Cash payment of Loan Trailing Fee (21 ) Change in fair value 39 Balance at December 31, 2016 $ 665 Significant Recurring Level 3 Fair Value Asset and Liability Input Sensitivity Key economic assumptions and the sensitivity of the current fair value to immediate changes in those assumptions at December 31, 2016 for Borrower Loans, Loans Held for Sale and Notes originated through the Note Channel are presented in the following table (in thousands, except percentages): Borrower Loans Notes Discount rate assumption: 7.30 % * 7.30 % * Resulting fair value from: 100 basis point increase $ 312,424 $ 313,022 200 basis point increase 309,302 309,888 Resulting fair value from: 100 basis point decrease $ 318,913 $ 319,535 200 basis point decrease 322,288 322,921 Default rate assumption: 11.94 % * 11.94 % * Resulting fair value from: 100 basis point increase $ 312,171 $ 312,759 200 basis point increase 308,833 309,401 Resulting fair value from: 100 basis point decrease $ 319,112 $ 319,743 200 basis point decrease 322,640 323,294 * Represents weighted average assumptions considering all credit grades. The following table presents the estimated impact on Prosper Funding’s estimated fair value of servicing assets and liabilities, calculated using different market servicing rates, prepayment rates and different default rates as of December 31, 2016 (in thousands, except percentages). Servicing Assets Servicing Liabilities Weighted average market servicing rate assumptions 0.625 % 0.625 % Resulting fair value from: Servicing rate increase to 0.65% 11,615 217 Servicing rate decrease to 0.60% 13,307 177 Weighted average prepayment assumptions 20.02 % 20.02 % Resulting fair value from: Applying a 1.1 multiplier to prepayment rate 12,262 194 Applying a 0.9 multiplier to prepayment rate 12,662 201 Weighted average default assumptions 11.59 % 11.59 % Resulting fair value from: Applying a 1.1 multiplier to default rate 12,271 198 Applying a 0.9 multiplier to default rate 12,654 198 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. |
American HealthCare Lending Acq
American HealthCare Lending Acquisition | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
American HealthCare Lending Acquisition | American HealthCare Lending Acquisition On January 23, 2015 , PMI acquired all of the outstanding limited liability company interests of American HealthCare Lending, LLC , and merged American HealthCare Lending with and into PHL, with PHL surviving the merger (the “Merger”). Under the terms of the purchase agreement, the sellers of American HealthCare Lending received an aggregate of $20.2 million in cash on the closing date and received $0.8 million in cash in January 2016. PHL operates a cloud-based patient financing company for healthcare providers in the cosmetic, dentistry, bariatric surgery, fertility, plastic surgery and other markets. PHL has relationships with a nationwide network of healthcare providers. These healthcare providers refer individuals who would like to finance medical procedures through Prosper’s marketplace. Through this acquisition Prosper expects to be able to more effectively offer affordable payment options to consumers who would like to finance elective medical procedures at the point of service. Prosper has included the financial results of PHL in the consolidated financial statements from the date of acquisition. The amounts of gross revenue and net loss of PHL included in Prosper’s consolidated financial statements from the merger date of January 23, 2015 to December 31, 2015 were $2.8 million and $(5.8) million , respectively. Prosper recorded acquisition-related expenses of $0.2 million for the year ended December 31, 2015 , which is included in general and administrative expense. The purchase price allocation is as follows (in thousands): Fair Value Assets: Cash $ 1,219 Accounts receivable, net 147 Property, equipment and software, net 6 Other assets 63 Identified intangible assets: Customer relationships 2,650 Developed technology 810 Brand name 60 Goodwill 16,825 Liabilities: Accrued expenses and other liabilities 708 Total purchase consideration $ 21,072 The goodwill balance is primarily attributed to expected operational synergies and the assembled workforce. Goodwill is expected to be deductible for U.S. income tax purposes. The impact was not material on Prosper’s revenue and net earnings on a pro forma basis for all periods presented. BillGuard Acquisition On October 9, 2015 , PMI acquired all of the outstanding shares of BillGuard. PMI merged BillGuard with and into Beach Merger Sub, Inc., a newly established entity wholly owned by PMI, with BillGuard surviving the merger. Under the terms of the purchase agreement, the sellers of BillGuard received an aggregate of approximately $20 million in cash on the closing date and received $5 million in cash in October 2016 after the contingencies were met. BillGuard has developed applications that help consumers manage their identity, finances and credit. The acquisition will enable Prosper to offer borrowers and investors a full suite of powerful tools to help them make smarter financial decisions including obtaining loans through Prosper, and will give Prosper access to BillGuard’s engineering and product talent pool. Prosper has included the financial results of BillGuard in the consolidated financial statements from the date of acquisition. The amounts of gross revenue and net loss of BillGuard included in Prosper’s consolidated financial statements from October 9, 2015 to December 31, 2015 were $0.2 million and $2.6 million , respectively. Prosper recorded acquisition-related expenses of $0.9 million for the year ended December 31, 2015 , which is included in General and Administrative Expense. The preliminary purchase price allocation as of the merger date is as follows (in thousands): Fair Value Assets: Cash $ 811 Property and equipment 82 Prepaid and other assets 152 Identified intangible assets: Developed technology 7,500 Customer relationships 3,600 Goodwill 19,543 Liabilities: Accounts payable and accrued expenses (1,635 ) Long term debt (1,395 ) Convertible loan (3,652 ) Deferred revenue (1,400 ) Total purchase consideration $ 23,606 The allocation of the purchase price has been finalized as the measurement period has ended. Prosper believes the amount of goodwill resulting from the allocation of purchase consideration is attributable to expected operating synergies, assembled workforce, and the future development initiatives of the assembled workforce, which will position Prosper to be able to further expand its long-term growth strategy. Goodwill is not expected to be deductible for U.S. or Israel income tax purposes. The following unaudited pro forma financial information summarizes the combined results of operations for Prosper and BillGuard, as though the companies were combined as of January 1, 2014. These pro forma results have been prepared for comparative purposes only and do not purport to be indicative of the results of operations which would have resulted had the acquisition occurred as of January 1, 2015, nor is it indicative of future operating results. The pro forma results presented below include, amortization of acquired intangible assets and compensation expense related to the post-acquisition compensation arrangements entered into with the continuing employees (in thousands, except per share information): Year Ended December 31, 2015 2014 Total net revenue $ 204,350 $ 81,195 Net loss (1) (33,677 ) (16,728 ) Basic and diluted net loss per share attributable to common stockholders $ (0.61 ) $ (0.71 ) (1) Net loss for the year ended December 31, 2015 excludes $1.6 million of one-time acquisition-related costs expenses incurred in 2015 . |
BillGuard Acquisition
BillGuard Acquisition | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
BillGuard Acquisition | American HealthCare Lending Acquisition On January 23, 2015 , PMI acquired all of the outstanding limited liability company interests of American HealthCare Lending, LLC , and merged American HealthCare Lending with and into PHL, with PHL surviving the merger (the “Merger”). Under the terms of the purchase agreement, the sellers of American HealthCare Lending received an aggregate of $20.2 million in cash on the closing date and received $0.8 million in cash in January 2016. PHL operates a cloud-based patient financing company for healthcare providers in the cosmetic, dentistry, bariatric surgery, fertility, plastic surgery and other markets. PHL has relationships with a nationwide network of healthcare providers. These healthcare providers refer individuals who would like to finance medical procedures through Prosper’s marketplace. Through this acquisition Prosper expects to be able to more effectively offer affordable payment options to consumers who would like to finance elective medical procedures at the point of service. Prosper has included the financial results of PHL in the consolidated financial statements from the date of acquisition. The amounts of gross revenue and net loss of PHL included in Prosper’s consolidated financial statements from the merger date of January 23, 2015 to December 31, 2015 were $2.8 million and $(5.8) million , respectively. Prosper recorded acquisition-related expenses of $0.2 million for the year ended December 31, 2015 , which is included in general and administrative expense. The purchase price allocation is as follows (in thousands): Fair Value Assets: Cash $ 1,219 Accounts receivable, net 147 Property, equipment and software, net 6 Other assets 63 Identified intangible assets: Customer relationships 2,650 Developed technology 810 Brand name 60 Goodwill 16,825 Liabilities: Accrued expenses and other liabilities 708 Total purchase consideration $ 21,072 The goodwill balance is primarily attributed to expected operational synergies and the assembled workforce. Goodwill is expected to be deductible for U.S. income tax purposes. The impact was not material on Prosper’s revenue and net earnings on a pro forma basis for all periods presented. BillGuard Acquisition On October 9, 2015 , PMI acquired all of the outstanding shares of BillGuard. PMI merged BillGuard with and into Beach Merger Sub, Inc., a newly established entity wholly owned by PMI, with BillGuard surviving the merger. Under the terms of the purchase agreement, the sellers of BillGuard received an aggregate of approximately $20 million in cash on the closing date and received $5 million in cash in October 2016 after the contingencies were met. BillGuard has developed applications that help consumers manage their identity, finances and credit. The acquisition will enable Prosper to offer borrowers and investors a full suite of powerful tools to help them make smarter financial decisions including obtaining loans through Prosper, and will give Prosper access to BillGuard’s engineering and product talent pool. Prosper has included the financial results of BillGuard in the consolidated financial statements from the date of acquisition. The amounts of gross revenue and net loss of BillGuard included in Prosper’s consolidated financial statements from October 9, 2015 to December 31, 2015 were $0.2 million and $2.6 million , respectively. Prosper recorded acquisition-related expenses of $0.9 million for the year ended December 31, 2015 , which is included in General and Administrative Expense. The preliminary purchase price allocation as of the merger date is as follows (in thousands): Fair Value Assets: Cash $ 811 Property and equipment 82 Prepaid and other assets 152 Identified intangible assets: Developed technology 7,500 Customer relationships 3,600 Goodwill 19,543 Liabilities: Accounts payable and accrued expenses (1,635 ) Long term debt (1,395 ) Convertible loan (3,652 ) Deferred revenue (1,400 ) Total purchase consideration $ 23,606 The allocation of the purchase price has been finalized as the measurement period has ended. Prosper believes the amount of goodwill resulting from the allocation of purchase consideration is attributable to expected operating synergies, assembled workforce, and the future development initiatives of the assembled workforce, which will position Prosper to be able to further expand its long-term growth strategy. Goodwill is not expected to be deductible for U.S. or Israel income tax purposes. The following unaudited pro forma financial information summarizes the combined results of operations for Prosper and BillGuard, as though the companies were combined as of January 1, 2014. These pro forma results have been prepared for comparative purposes only and do not purport to be indicative of the results of operations which would have resulted had the acquisition occurred as of January 1, 2015, nor is it indicative of future operating results. The pro forma results presented below include, amortization of acquired intangible assets and compensation expense related to the post-acquisition compensation arrangements entered into with the continuing employees (in thousands, except per share information): Year Ended December 31, 2015 2014 Total net revenue $ 204,350 $ 81,195 Net loss (1) (33,677 ) (16,728 ) Basic and diluted net loss per share attributable to common stockholders $ (0.61 ) $ (0.71 ) (1) Net loss for the year ended December 31, 2015 excludes $1.6 million of one-time acquisition-related costs expenses incurred in 2015 . |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Other Intangible Assets Goodwill The following table presents the goodwill activity for the periods presented (in thousands): Goodwill - January 1, 2015 $ — 2015 acquisitions $ 36,368 Goodwill - December 31, 2015 $ 36,368 2016 acquisitions — Goodwill - December 31, 2016 $ 36,368 We did not record any goodwill impairment expense for the years ended December 31, 2016 , 2015 and 2014 . Other Intangible Assets The following table presents the detail of other intangible assets for the periods presented (dollars in thousands): December 31, 2016 Gross Carrying Value Accumulated Amortization Net Carrying Value Remaining Useful Life (In Years) Developed technology $ 8,310 $ (2,393 ) $ 5,917 3.8 User base and customer relationships 6,250 (2,955 ) 3,295 8.3 Brand name 60 (60 ) — 0.0 Total intangible assets subject to amortization $ 14,620 $ (5,408 ) $ 9,212 December 31, 2015 Gross Carrying Value Accumulated Amortization Net Carrying Value Remaining Useful Life (In Years) Developed technology $ 8,310 $ (622 ) $ 7,688 4.8 User base and customer relationships 6,250 (892 ) 5,358 9.1 Brand name 60 (55 ) 5 0.1 Total intangible assets subject to amortization $ 14,620 $ (1,569 ) $ 13,051 We did not record any intangible additions for the year ended December 31, 2016 . The user base and customer relationship intangible assets are being amortized on an accelerated basis over a three to ten year period. The technology and brand name intangible assets are being amortized on a straight line basis over three to five years and one year, respectively. Amortization expense for the years ended December 31, 2016 , 2015 and 2014 was $3.8 million , $1.6 million and $0 million , respectively. Estimated amortization of purchased intangible assets for future periods is as follows (in thousands): Year Ending December 31, 2017 $ 3,260 2018 2,329 2019 1,779 2020 1,344 Thereafter 500 Total $ 9,212 |
Other Liabilities
Other Liabilities | 12 Months Ended |
Dec. 31, 2016 | |
Other Liabilities [Abstract] | |
Other Liabilities | Other Liabilities Other Liabilities includes the following (in thousands): Year Ending December 31, 2016 2015 Class action settlement liability $ 2,996 $ 5,949 Repurchase liability for unvested restricted stock awards 118 473 Contingent consideration — 4,801 Deferred revenue 226 1,591 Servicing liabilities 198 484 Deferred rent 4,469 5,240 Restructuring liability 6,052 — Other 3,114 2,197 Total Other Liabilities $ 17,173 $ 20,735 |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share Prosper computes net 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. We compute Earnings per Share (“EPS”) using the two-class method. The two-class method allocates earnings that otherwise would have been available to common shareholders to holders of participating securities. We consider 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 PMI’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 as a result these shares were considered participating securities. During the year ended December 31, 2016 , 2015 and 2014 , 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 as a result were 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 and Consolidated Statements of Convertible Preferred Stock and Stockholders’ Deficit 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 (net loss in thousands): Year ended December 31, 2016 2015 2014 Numerator: Net loss $ (118,741 ) $ (25,968 ) $ (2,669 ) Excess return to preferred shareholders on repurchase — — (14,892 ) Net loss available to common stockholders for basic and diluted EPS (118,741 ) (25,968 ) (17,561 ) Denominator: Weighted average shares used in computing basic and diluted net loss per share 64,196,537 55,547,408 44,484,005 Basic and diluted net loss per share $ (1.85 ) $ (0.47 ) $ (0.39 ) Due to losses attributable to PMI’s common shareholders for each of the periods below, the following potentially dilutive shares are excluded from the diluted net loss per share calculation because they were anti-dilutive under the treasury stock or if converted method: Year ended December 31, 2016 2015 2014 (shares) (shares) (shares) Excluded securities: Convertible preferred stock issued and outstanding 177,388,425 177,388,425 153,499,785 Stock options issued and outstanding 44,099,577 34,358,106 24,974,990 Unvested stock options exercised 1,126,210 9,806,170 20,571,345 Restricted Stock Units 351,721 190,517 — Warrants issued and outstanding 988,513 588,660 884,435 Series E Convertible Preferred Stock warrants 1,254,111 — — Total common stock equivalents excluded from diluted net loss per common share computation 225,208,557 222,331,878 199,930,555 The number of shares issued and outstanding reflect a 5 -for- 1 forward stock split effected by PMI on February 16, 2016. |
Convertible Preferred Stock, Wa
Convertible Preferred Stock, Warrant Liability and Stockholders’ Deficit | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
Convertible Preferred Stock, Warrant Liability and Stockholders’ Deficit | Convertible Preferred Stock, Warrant Liability and Stockholders’ Deficit 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 New Series A (“New 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 (“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 New 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 New 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 New 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 New 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 New Series B (“New 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 New 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 New Series C (“New 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 New 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 New Series A convertible preferred Stock and New 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 New Series A convertible preferred Stock and 5,667,790 share of New 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 New Series D (“New 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 New 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 New 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 New Series E ("New Series E") convertible preferred stock. These shares are reserved for the convertible preferred stock warrants that were also issued in December 2016. 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, 2016 are disclosed in the table below (dollar amounts in thousands, except per share information): Convertible Preferred Stock Par Value Authorized shares Outstanding and Issued Liquidation Preference New Series A $ 0.01 68,558,220 68,558,220 $ 19,774 Series A-1 0.01 24,760,915 24,760,915 49,522 New Series B 0.01 35,775,880 35,775,880 21,581 New Series C 0.01 24,404,770 24,404,770 70,075 New Series D 0.01 23,888,640 23,888,640 165,000 New Series E 0.01 40,000,000 — — 217,388,425 177,388,425 $ 325,952 The number of shares issued and outstanding reflect a 5 -for-1 forward stock split effected by PMI on February 16, 2016. Dividends Dividends on shares of the New Series A, New Series B, New Series C, New Series D and New Series E 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 New Series A, New Series B, New Series C, New Series D and New Series E convertible preferred stock have been paid or set aside for payment to the New Series A, New Series B, New Series C New Series D and New Series E convertible 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 (i) 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 (ii) 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) including at least 14% of the voting power of the outstanding Series A-1 convertible preferred stock. In addition, if a holder of the New Series A convertible preferred stock has converted any of the New 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, the New Series A, New Series B, New Series C, the New Series D and the New Series E convertible preferred stock converts into PMI common stock at a 1 :1 ratio while the Series A-1 convertible preferred stock converts into common stock at a 1,000,000 :1 ratio. Liquidation Rights PMI’s convertible preferred stock has been classified as temporary equity on the Consolidated Balance Sheets. The preferred stock is not redeemable; however, upon in the event of a voluntary or involuntary liquidation, dissolution, change in control or winding up of PMI, holders of the convertible preferred stock may have the right to receive its liquidation preference under the terms of PMI’s certificate of incorporation. Each holder of New Series E convertible preferred stock is entitled to receive prior and in preference to any distribution of proceeds from a liquidation event to the holders of New Series A, New Series B, New Series C, New Series D and Series A-1 preferred stock or common stock, an amount per share for each share of New Series E 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 New Series E convertible preferred stock, each holder of New Series A, New Series B, New Series C and New Series D convertible preferred stock is entitled to receive, on a pari passu basis, prior and in preference to any distribution of proceeds from a liquidation event to the holders of Series A-1 preferred stock or common stock, an amount per share for each share of New Series A, New Series B, New Series C and New Series D 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 New Series A, New Series B, New Series C and New Series D 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 New Series A, New Series B, New Series C and New Series D convertible preferred stock and Series A-1 preferred stock, the entire remaining proceeds legally available for distribution will be distributed pro rata to the holders of New Series A preferred stock and common stock in proportion to the number of shares of common stock held by them assuming the New Series A 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 New Series A convertible preferred stock which the holders of New Series A convertible preferred stock shall be entitled to receive is three times the original issue price for the New Series A convertible preferred stock. At present, the liquidation preferences are equal to $0.29 per share for the New Series A convertible preferred stock, $2.00 per share for the Series A-1 convertible preferred stock, $0.60 per share for the New Series B convertible preferred stock, $2.87 per share for the New Series C convertible preferred stock, $6.91 for the New Series D convertible preferred stock and $1.48 for the New Series E 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 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 In connection with the Settlement and Release Agreement (as described in Note 17) that Prosper signed on November 17, 2016, PMI issued warrants to purchase 20,267,135 shares of PMI's New Series E convertible redeemable preferred stock at $0.01 per share. The warrants expire ten years from the date of issuance. For the year ended December 31, 2016, Prosper recognized expense from the fair value measurement of the warrants of $21.7 million , of which $7 thousand was from the remeasurement of the fair value of the warrants. The expense is recorded through other expenses in the statement of operations. To determine the fair value of the New Series Convertible Preferred Stock Warrants, the Company first determined the value of a share of a New Series E convertible redeemable 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 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 probability weighted expected return method (“PWERM”) was used to allocate the BEV to the various classes of the Company’s equity, including the Company’s preferred stock. The concluded per share value for the New Series E convertible redeemable preferred stock warrants utilized the Black-Scholes option pricing model. As of December 31, 2016, the Company determined the fair value of the outstanding convertible preferred stock warrants utilizing the following assumptions: As of December 31, 2016 Volatility 40.0% Risk-free interest rate 2.45% Remaining contractual term (in years) 9.96 Dividend yield 0% The above assumptions were determined as follows: 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 because the Company has limited information on the volatility of the 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, 2016, and for zero coupon U.S. Treasury notes with maturities approximately equal to the term of the warrant. Remaining Contractual Term: The remaining contractual term represents the time from the date of the valuation to the expiration of the warrant. Dividend Yield: The expected dividend assumption is based on the Company’s current expectations about the Company’s anticipated dividend policy. 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 May 15, 2014, PMI amended and restated its certificate of incorporation to effect an increase in the number of authorized shares of stock. The total number of shares of stock which PMI has the authority to issue is 555,610,528 , consisting of 338,222,425 shares of common stock, $0.01 par value per share, and 217,388,425 shares of preferred stock, $0.01 par value per share, 68,558,220 of which are designated as New Series A preferred stock, 24,760,915 of which are designated as Series A-1 preferred stock, 35,775,880 of which are designated New Series B preferred stock, 24,404,770 of which are designated as Series C preferred stock, 23,888,640 of which are designated New Series D preferred stock, and 40,000,000 of which are designated New Series E preferred stock. As of December 31, 2016 , 70,843,044 shares of common stock were issued and 69,907,109 shares of common stock were outstanding. As of December 31, 2015 , 70,367,425 shares of common stock were issued and 69,431,490 shares of common stock were outstanding. Each holder of common stock is entitled to one vote for each share of common stock held . During 2015, PMI repurchased 4,225,490 shares of common stock from certain employees at a price equal to 6.91 per share for an aggregate purchase price of $29.2 million . As the purchase price exceeded the fair value of common stock at the time of repurchase, Prosper recognized compensation costs of $6.2 million of which $0.33 million is recorded in Origination and Servicing, $0.07 million in Sales and Marketing and $5.7 million in General and Administrative on the Consolidated Statements of Operations. As part of the transactions, PMI repurchased 3,607,095 shares for a total of $24.9 million from Prosper’s executive officers. Common Stock Issued upon Exercise of Stock Options During the year ended December 31, 2016 and 2015 , PMI issued 466,300 and 3,211,935 shares of common stock, respectively, upon the exercise of options for cash proceeds of $0.31 million and $0.88 million , respectively, of which 76,045 were unvested in 2015. Certain options are eligible for exercise prior to vesting. These unvested options may be exercised for restricted shares of common stock that have the same vesting schedule as the options. Prosper records a liability for the exercise price paid upon the exercise of unvested options, which is reclassified to common stock and additional paid-in capital as the shares vest. Should the holder’s employment be terminated, the unvested restricted shares are subject to repurchase by PMI at an amount equal to the exercise price paid for such shares. At December 31, 2016 and 2015 , there were 1,126,210 and 9,806,170 shares respectively of restricted stock outstanding that remain unvested and subject to PMI’s right of repurchase. Common Stock Issued upon Exercise of Warrants For the year ended December 31, 2016 and 2015 , PMI issued 56,480 and 207,065 shares of common stock upon the exercise of warrants, for $0.38 per share and $0.61 per share respectively. |
Stock-based Compensation
Stock-based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based Compensation | Stock-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"). 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, 2016 , under the 2015 Plan, options to purchase up to 50,458,108 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. The number of options, restricted stock units and amounts per share reflects a 5 -for-1 forward stock split effected by PMI on February 16, 2016. Stock Option Reprice On May 3, 2016, the Compensation Committee of the Board of Directors of PMI approved a stock option repricing program, (the “Reprice”) authorizing PMI’s officers to reprice certain outstanding stock options held by employees and directors that have exercise prices above the current fair market value of PMI’s common stock. The repricing was effected on May 16, 2016 for eligible directors and employees located in the United States and on May 19, 2016 for eligible employees located in Israel. Prosper believes the repricing of such stock options will encourage the continued service of valued employees and directors, and motivate such service providers to perform at high levels, both of which are critical to Prosper’s continued success. Prosper expects to incur additional stock based compensation charges as a result of this repricing. The financial statement impact of this repricing is $2.2 million in the period ended December 31, 2016 and $2.0 million (net of forfeitures) that will be recognized over the remaining weighted average vesting period of 2.5 years. Early Exercised Stock Options With the approval of its Board of Directors, PMI allows certain employees and directors to exercise stock options granted under the 2005 Plan prior to vesting. The unvested shares are subject to a repurchase right held by PMI at the original exercise price. Early exercises of options are not deemed to be substantive exercises for accounting purposes and therefore, amounts received for early exercises are initially recorded in repurchase liability for unvested restricted stock awards which is included in Other Liabilities on the Consolidated Balance Sheets. Such amounts are reclassified to common stock and additional paid-in capital as the underlying shares vest. The activity of options that were early exercised under the 2005 Plan follow for the years below: Early exercised options, unvested Weighted average exercise price Weighted Average Contractual Term (in years) Balance as of January 1, 2016 9,806,170 0.05 Repurchase of restricted stock (673,750 ) 0.12 Restricted stock vested (8,006,210 ) 0.03 Balance as of December 31, 2016 1,126,210 0.11 0.42 Options expected to vest 1,086,592 $ 0.11 0.42 Additional information regarding the unvested early exercised stock options outstanding as of December 31, 2016 is as follows: Options Outstanding Range of Exercise Prices Number Outstanding Weighted –Avg. Remaining Life Weighted –Avg. Exercise Price $0.02 881,295 0.20 $ 0.02 0.11 171,855 1.05 0.11 1.13 73,060 1.61 1.13 $0.02 - $1.13 1,126,210 0.42 $ 0.11 Stock Option Activity Stock option activity under the 2005 Plan and 2015 Plan is summarized as follows for the years below: Options Issued and Outstanding Weighted- Average Exercise Price Weighted Average Contractual Term (in years) Balance as of January 1, 2016 40,425,605 $ 2.64 Options granted 19,655,338 $ 2.14 Options exercised – vested (466,300 ) $ 0.65 Options forfeited (18,218,924 ) $ 2.43 Balance as of December 31, 2016 41,395,719 $ 1.48 8.28 Options vested and expected to vest as of December 31, 2016 33,019,875 $ 1.48 8.28 Options vested and exercisable at December 31, 2016 24,589,730 $ 1.06 7.65 For the year ended December 31, 2016 , we granted stock options to purchase 19,655,338 shares of common stock at a weighted average grant date fair value of $2.04 per share. Other Information Regarding Stock Options Additional information regarding common stock options outstanding as of December 31, 2016 is as follows: Options Outstanding Options Vested and Exercisable Range of Exercise Prices Number Outstanding Weighted – Avg. Remaining Life Weighted – Avg. Exercise Price Number Vested Weighted - Avg. Exercise Price 0.02 - $0.99 12,236,805 6.88 $ 0.12 12,236,805 $ 0.12 1.00 - 1.99 2,788,790 7.61 1.13 1,987,935 1.13 2.00 - 3.62 26,370,124 9.00 2.14 10,364,990 2.14 0.02 - 3.62 41,395,719 8.28 $ 1.48 24,589,730 $ 1.06 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 stock-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 publically 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 the estimates, the difference will be recorded as a cumulative adjustment in the period estimates are revised. No compensation cost is recorded for stock options that do not vest. The fair value of PMI’s stock option awards for the year ended December 31, 2016 , 2015 and 2014 was estimated at the date of grant using the Black-Scholes model with the following average assumptions: Year ended December 31, 2016 2015 2014 Volatility of common stock 50.88 % 55.69 % 68.28 % Risk-free interest rate 1.29 % 1.74 % 1.79 % Expected life 5.8 years 6.0 years 5.7 years Dividend yield — % — % — % PMI did not grant any performance-based options in 2015 or 2016 . Under the 2005 Stock Plan certain executive officers of PMI were granted performance-based stock options during 2014 . The vesting of these performance-based stock options was contingent upon the achievement of certain revenue targets or target ratios of marketing expenditures to revenues for the year ended December 31, 2014 . PMI granted 10,164,480 performance-based stock options with an exercise price of $0.11 per share during 2014 . The contractual term of these options is 10 years . Since the performance targets were achieved, 9,624,480 performance-based stock options became fully vested and 540,000 performance-based stock options were forfeited on the termination of employment. The aggregate expense recognized during 2014 related to these performance-based stock options was $587 thousand . The fair value of the performance-based stock options was estimated on the date of grant using the Black-Scholes option valuation model. Prosper used the following assumptions in measuring the fair value of these performance-based stock options: a 66% rate for expected volatility, 0% rate for expected dividends, 5.23 years for the expected term and a 1.66% risk-free rate. Restricted Stock Unit Activity During the year ended December 31, 2015, PMI began granting restricted stock units (“RSUs”) to certain employees that are subject to three -year vesting terms or a four year vesting terms and the occurrence of a liquidity event. The aggregate fair value of the RSUs granted was $7.8 million . The following table summarizes the activities for PMI’s RSUs during 2016 : Number of Shares Weighted-Average Grant Date Fair Value Unvested at January 1, 2016 1,835,510 5.52 Granted 3,818,225 2.07 Vested (444,553 ) 5.52 Forfeited (3,214,023 ) 3.45 Unvested - December 31, 2016 1,995,159 2.16 The following table presents the amount of stock-based compensation related to stock-based awards granted to employees recognized in Prosper’s consolidated statements of operations during the periods presented (in thousands): December 31, 2016 2015 2014 Origination and Servicing $ 2,004 $ 1,231 $ 104 Sales and Marketing 2,914 2,561 767 General and Administrative 14,824 9,219 1,150 Restructuring 45 — — Total stock based compensation $ 19,787 $ 13,011 $ 2,021 During the year ended December 31, 2016 , 2015 and 2014 , Prosper capitalized $718 thousand , $623 thousand and $21 thousand , respectively, of stock-based compensation as internal use software and website development costs. As of December 31, 2016 , the unamortized stock-based compensation expense related to Prosper employees’ unvested stock-based awards was approximately $28.8 million , which will be recognized over the remaining weighted-average vesting period of approximately 2.3 years. |
Restructuring
Restructuring | 12 Months Ended |
Dec. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring On May 3, 2016, Prosper adopted a strategic restructuring of its business. This restructuring is intended to streamline our operations and support future growth efforts. Under this restructuring, Prosper closed its Salt Lake City, Utah location. As a result of this restructuring, Prosper terminated 167 employees across all locations. In December 2016, Prosper shut down its Tel Aviv location, resulting in the termination of 31 employees. In connection with the restructuring, Prosper has recognized employee severance and benefits charges of approximately $7.3 million during the year ended December 31, 2016, which were included in “Restructuring Charges” within the consolidated statements of operations. In addition to the employment costs associated with the restructuring, Prosper is also engaged in marketing for sublease, space in our existing office space that is no longer needed due to the reduction in headcount. In total, the losses incurred on the leases in San Francisco, Salt Lake City, Delaware, Tel Aviv and Phoenix totaled $8.7 million which has been included in “Restructuring Charges” within the consolidated statement of operations. Prosper wrote off $0.8 million in property plant and equipment related to these locations and incurred $0.2 million of other restructuring charges. Other than accretion and changes in sub lease 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): Severance Related Facilities Related Total Balance January 1, 2016 $ — $ — $ — Adjustments to expense 7,256 8,735 15,991 Transfer from deferred rent — 764 764 Less: Cash paid (6,659 ) (3,447 ) (10,106 ) Balance December 31, 2016 $ 597 $ 6,052 $ 6,649 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes [Line Items] | |
Income Taxes | Income Taxes The components of income tax are as follows (in thousands): Year Ended December 31, 2016 2015 2014 Current: Federal $ — $ — $ — State — — — Foreign 124 (5 ) — Total Current Income Tax (Benefit) 124 (5 ) — Deferred: Federal 394 320 — State 28 25 — Foreign — — Total Deferred Income Tax 422 345 — Total Income Tax $ 546 $ 340 $ — The income tax expense (benefit) differed from the amount computed by applying the U.S. federal income tax rate of 34% to pretax loss as a result of the following: Year Ended December 31, 2016 2015 2014 Federal tax at statutory rate 34 % 34 % 34 % State tax at statutory rate (net of federal benefit) 7 % 12 % 1 % Change to Uncertain Tax Position — % 10 % — % Permanent Items (1 )% — % (11 )% Incentive Stock Options (2 )% (9 )% (9 )% Acquisition Related Costs — % (3 )% — % Change in valuation allowance (37 )% (46 )% (25 )% Credits and Reserves — % — % 9 % Other (1 )% 1 % 1 % — % (1 )% — % Temporary items that give rise to significant portions of deferred tax assets and liabilities at December 31, 2016 and 2015 are as follows (in thousands): December 31, 2016 2015 Net operating loss carry forwards $ 85,759 $ 44,632 Research & other credits 626 502 Settlement liability 1,230 2,466 Stock compensation 7,300 3,193 Accrued liabilities 4,884 5,794 Restructuring liability 2,424 — Other 62 126 Deferred tax assets 102,285 56,713 Fair value of loans (1,045 ) (1,406 ) Net servicing rights (4,895 ) (5,752 ) Fixed assets (1,226 ) (721 ) Intangible assets (3,226 ) (4,246 ) Foreign Earnings (270 ) — Deferred tax liabilities (10,662 ) (12,125 ) Net deferred tax assets 91,623 44,588 Valuation allowance (92,389 ) (44,933 ) Net deferred tax liabilities $ (766 ) $ (345 ) 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, 2016 , increased by $47.5 million to $92.4 million from $44.9 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 $233.6 million and $257.1 million respectively as of December 31, 2016 , available to reduce future income subject to income taxes. The federal net operating loss carryforwards will begin to expire in 2025 . The state net operating loss carryforwards will begin to expire in 2017 . Prosper has federal and California research and development tax credits of approximately $428 thousand and $450 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): December 31, December 31, Balance at January 1, $ 913 $ 4,927 Decrease related to current year tax position (4,014 ) Balance at December 31, $ 913 $ 913 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, 2016 , Prosper has not incurred any interest or penalties. All tax returns will remain open for examination by the federal and most state taxing authorities for 3 years and 4 years , respectively, from the date of utilization of any net operating loss carryforwards or research and development credits. |
Prosper Funding LLC | |
Income Taxes [Line Items] | |
Income Taxes | Income Taxes Prosper Funding incurred no income tax provision for the year ended December 31, 2016 and 2015 . Prosper Funding is a US disregarded entity and the loss is included in the return of its parent, PMI. Since PMI is in a loss position, not currently subject to income taxes, and has fully reserved its deferred tax asset, the net effective tax rate for Prosper Funding is 0% . |
Colchis Agreement
Colchis Agreement | 12 Months Ended |
Dec. 31, 2016 | |
Entity Information [Line Items] | |
Colchis Agreement | Colchis Agreement Prosper and Colchis Capital Management, L.P. (“Colchis”) entered into a Supplementary Agreement, dated June 1, 2013, and Addendum to the Supplementary Agreement, dated November 18, 2013 (together, the “Colchis Agreement”), pursuant to which Prosper agreed to give Colchis certain incentives to encourage Colchis to invest in Borrower Loans and Notes through the platform. On April 21, 2015, Colchis filed a demand for arbitration to resolve interpretative questions relating to the Colchis Agreement, including, for example, whether certain rights given to Colchis extended beyond the term of the Colchis Agreement. On October 17, 2016, the arbitrator issued a final award in favor of Colchis. On November 17, 2016, Prosper and Colchis entered into a Settlement and Release Agreement, pursuant to which Colchis has agreed to terminate the Colchis Agreement and waive all rights conferred under such agreement in exchange for a $9 million cash payment by PMI and an agreement by PMI to issue a warrant to purchase shares of a new series of preferred stock representing 7% of PMI’s capitalization on a fully diluted basis as of the date of the issuance of the warrant (the “New Series”) for $.01 per share (the “Equity Payment”). This transaction has been accounted for as a termination of a contract and is included in other expense for $30.7 million. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Entity Information [Line Items] | |
Commitments and Contingencies | 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. Future Minimum Lease Payments Prosper has entered into various non-cancelable operating leases for certain offices with contractual lease periods expiring between 2022 and 2027 . Prosper recognized total rental expenses under operating leases of $6.9 million , $4.1 million and $2.0 million during the years ended December 31, 2016 , 2015 and 2014 , respectively. Future minimum rental payments under these leases as of December 31, 2016 are as follows (in thousands): 2017 $ 7,660 2018 8,129 2019 8,538 2020 8,781 2021 8,835 Thereafter 17,767 Total future operating lease obligations $ 59,710 The payments in the above table include amounts that have been accrued for as part of the restructuring liability in Note 15 Restructuring. Restructuring accrual balances related to operating facility leases were $6.1 million at December 31, 2016. Operating Commitments Prosper has entered into an agreement with WebBank, under which all Borrower Loans originated through the marketplace are made by WebBank under its bank charter. 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 $143,500 , Prosper is required to pay WebBank an amount equal to such deficiency. Accordingly, the minimum fee for the year ended December 31, 2017 is $1.7 million . The minimum fee is $1.7 million and $0.9 million in each of the years 2018 and 2019, respectively. Additionally, under the agreement with WebBank, Prosper is required to maintain a 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, 2016 the Company was in compliance with the covenant. Loan Purchase Commitments Prosper has entered into an agreement with WebBank to purchase $18.6 million of Borrower Loans that WebBank originated during the last two business days of the year ended December 31, 2016 and the first business day of the quarter ending March 31, 2017. Prosper will purchase these Borrower Loans within the first three business days of the quarter ending March 31, 2017. Repurchase and Indemnification Contingency 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. The fair value of the indemnification and repurchase obligation is estimated based on historical experience and the initial fair value is insignificant. Prosper recognizes a liability for the repurchase and indemnification obligation when the Borrower Loans are issued. Indemnified or 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 or at the time an indemnification payment is made. The maximum potential amount of future payments associated under this obligation is the outstanding balances of the Borrower Loans sold through the Whole Loan channels, which at December 31, 2016 is $3.5 billion . Prosper had accrued $0.6 million and $0.5 million as of December 31, 2016 and 2015 respectively in regard to this obligation. Securities Law Compliance From inception of Prosper through October 16, 2008, Prosper sold approximately $178.0 million of Borrower Loans to investors through the old platform structure, whereby Prosper assigned promissory notes directly to investors. Prosper did not register the offer and sale of the promissory notes corresponding to these Borrower Loans under the Securities Act or under the registration or qualification provisions of any state securities laws. Prosper believes that the question of whether or not the operation of the platform during this period constituted an offer or sale of “securities” involved a complicated factual and legal analysis and was uncertain. If the sales of promissory notes offered through the platform during this period were viewed as a securities offering, Prosper would have failed to comply with the registration and qualification requirements of federal and state laws. In 2008, plaintiffs filed a class action lawsuit against Prosper and certain of its executive officers and directors in the Superior Court of California, County of San Francisco, California. The suit was brought on behalf of all promissory note purchasers on the platform from January 1, 2006 through October 14, 2008. The lawsuit alleged that Prosper offered and sold unqualified and unregistered securities in violation of the California and federal securities laws. On July 19, 2013 solely to avoid the costs, risks and uncertainties inherent in litigation, and without admitting any liability or wrongdoing, the parties to the class action litigation agreed to enter into a settlement to resolve all claims related thereto (the “Settlement”). In connection with the Settlement, Prosper agreed to pay an aggregate amount of $10 million into a settlement fund, split into four annual installments of $2 million in 2014, $2 million in 2015, $3 million in 2016 and $3 million in 2017. The Settlement received final approval in a final order and judgment entered by the Superior Court on April 16, 2014. Pursuant to the final order and judgment, the claims in the class action were dismissed, and at the effective time of the Settlement (June 16, 2014), the defendants will have been released by the plaintiffs from all claims that were or could have been asserted concerning the issues alleged in the class action lawsuit. The reserve for the class action settlement liability is $3.0 million in the Consolidated Balance Sheets as of December 31, 2016 . |
Prosper Funding LLC | |
Entity Information [Line Items] | |
Commitments and Contingencies | Commitments and Contingencies In 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. Prosper Funding 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 Funding'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 by WebBank under its bank charter. 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 $143,500 , Prosper is required to pay WebBank an amount equal to such deficiency. Accordingly, the minimum fee for the year ended December 31, 2017 is $1.7 million . The minimum fee is $1.7 million and $1.0 million in each of the years 2018 and 2019, respectively. Additionally, under the agreement with WebBank, Prosper is required to maintain a 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, 2016 the Company was in compliance with the covenant. Loan Purchase Commitments Prosper Funding has entered into an agreement with WebBank to purchase $18.6 million of Borrower Loans that WebBank originated during the during the last two business days of the year ended December 31, 2016 and the first business day of the quarter ending March 31, 2017. Prosper will purchase these Borrower Loans within the first three business days of the quarter ended March 31, 2017. Repurchase and Indemnification Contingency Under the terms of the loan purchase agreements between Prosper Funding 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. The fair value of the indemnification and repurchase obligation is estimated based on historical experience and the initial fair value is insignificant. Prosper Funding recognizes a liability for the repurchase and indemnification obligation when the Borrower Loans are issued. Indemnified or 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 or at the time an indemnification payment is made. The maximum potential amount of future payments associated under this obligation is the outstanding balances of the Borrower Loans sold through the Whole Loan Channel, which at December 31, 2016 is $3.4 billion . Prosper Funding had accrued $0.6 million and $0.5 million as of December 31, 2016 and 2015 respectively in regard to this obligation. Colchis Agreement PMI, PFL and Colchis Capital Management, L.P. (“Colchis”) entered into a Supplementary Agreement, dated June 1, 2013, and Addendum to the Supplementary Agreement, dated November 18, 2013 (together, the “Colchis Agreement”), pursuant to which Prosper agreed to give Colchis certain incentives to encourage Colchis to invest in Borrower Loans and Notes through the platform. On April 21, 2015, Colchis filed a demand for arbitration to resolve interpretative questions relating to the Colchis Agreement, including, for example, whether certain rights given to Colchis extended beyond the term of the Colchis Agreement. On October 17, 2016, the arbitrator issued a final award in favor of Colchis. On November 17, 2016, PMI, PFL and Colchis entered into a Settlement and Release Agreement, pursuant to which Colchis has agreed to terminate the Colchis Agreement and waive all rights conferred under such agreement in exchange for a $9 million cash payment by PMI and an agreement by PMI to issue a warrant to purchase shares of a new series of preferred stock representing 7% of PMI’s capitalization on a fully diluted basis as of the date of the issuance of the warrant (the “New Series”) for $.01 per share (the “Equity Payment”). This has been accounted for by PFL as a termination of a contract and is included in other expense. |
Related Parties
Related Parties | 12 Months Ended |
Dec. 31, 2016 | |
Entity Information [Line Items] | |
Related Parties | Related Parties Since 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 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 on Prosper’s marketplace by 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 December 31, 2016 and 2015 are summarized below (in thousands): Related Party Aggregate Amount of Notes Purchased Interest Earned on Notes 2016 2015 2016 2015 Executive officers and management $ 1,065 $ 1,361 $ 225 $ 206 Directors 508 244 34 9 Total $ 1,573 $ 1,605 $ 259 $ 215 Related Party Notes balance as of December 31, 2016 2015 Executive officers and management $ 1,620 $ 1,912 Directors 537 325 $ 2,157 $ 2,237 |
Prosper Funding LLC | |
Entity Information [Line Items] | |
Related Parties | Related Parties Since inception, Prosper Funding has engaged in various transactions with its directors and 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, directors who are not executive officers and certain affiliates participate on Prosper Funding’s lending platform 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 Funding as of December 31, 2016 and 2015 are summarized below (in thousands): Aggregate Amount of Interest Earned on Related Party Notes Purchased Notes 2016 2015 2016 2015 Executive officers and management $ 1,065 $ 1,361 $ 225 $ 206 Directors — — — — Total $ 1,065 $ 1,361 $ 225 $ 206 Related Party Notes balance as of December 31, 2016 2015 Executive officers and management $ 1,620 $ 1,912 Directors — — Total $ 1,620 $ 1,912 |
Postretirement Benefit Plans
Postretirement Benefit Plans | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Postretirement Benefit Plans | Postretirement Benefit Plans Prosper 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, 2016 , 2015 and 2014 , Prosper has contributed $2.6 million , $1.9 million and $0.7 million , respectively to the 401(k) plan, respectively. |
Significant Concentrations
Significant Concentrations | 12 Months Ended |
Dec. 31, 2016 | |
Entity Information [Line Items] | |
Significant Concentrations | Significant Concentrations Prosper is dependent on third party funding sources such as banks 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, 2016 , 20% , 16% and 9% were purchased by three different parties. This compares to 37% , 19% and 11% for the year ended December 31, 2015 . Further, a significant portion of our business is dependent on funding through the Whole Loan Channel, for which 90% and 95% of Borrower Loans were originated through the Whole Loan Channel in the years ended December 31, 2016 and 2015, 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 and investment funds to provide the funds 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, 2016 , 20% , 16% and 9% were purchased by three different parties. This compares to 37% , 19% and 11% for the year ended December 31, 2015 . Further, a significant portion of our business is dependent on funding through the Whole Loan Channel. 90% and 95% of Borrower Loans were originated through the Whole Loan Channel in the years ending December 31, 2016 and 2015 , respectively. |
Segments
Segments | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Segments | Segments Our chief operating decision maker reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. As such, we have a single reporting and operating segment. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Entity Information [Line Items] | |
Subsequent Events | Subsequent Events On February 27, 2017, PFL entered into a Loan Purchase Agreement (the “Purchase Agreement”) with PF LoanCo Funding LLC (the “Beneficiary”) and Wilmington Savings Fund Society, FSB, not in its individual capacity but solely in its capacity as trustee (the “Trustee”) of PF LoanCo Trust (the “Purchaser”). The Purchase Agreement sets forth the terms and conditions pursuant to which PFL may sell eligible consumer loans in an aggregate amount of up to $5.0 billion (including certain loans purchased by an affiliate of the Beneficiary prior to the date of the Purchase Agreement (the “Pre-Purchased Loans”)) to the Purchaser for the benefit of the Beneficiary over a two-year period. Under the Purchase Agreement, PFL will be obligated to (i) offer for purchase minimum monthly volumes of eligible loans to the Purchaser, and (ii) deliver a minimum percentage of the monthly volume of such loans that the Purchaser elects to purchase for the benefit of the Beneficiary, if any (together, the “Volume Requirements”). In connection with the Purchase Agreement, on February 27, 2017, PMI entered into a Warrant Agreement with PF WarrantCo Holdings, LP, an affiliate of the Beneficiary (the “Warrant Holder”), and, for certain limited purposes, New Residential Investment Corp. (the “Warrant Agreement”). Pursuant to the Warrant Agreement, PMI issued to Warrant Holder three warrants (together, the “Series F Warrant”) to purchase up to in aggregate 177,720,706 shares of PMI’s Series F Preferred Stock at an exercise price of $0.01 per share (the “Warrant Shares”). Warrant Holder’s right to exercise the Series F Warrant is subject to monthly vesting during the term of the Purchase Agreement based upon the volume of loans Purchaser elects to purchase (if any) in each month, subject to certain cure rights (except that a certain portion of the Series F Warrant will be immediately exercisable as a result of the Pre-Purchased Loans). Additionally, certain portions of the Series F Warrant may automatically vest for a given month in the event that PFL fails to meet its Volume Requirements under the Purchase Agreement for such month. Under the terms of the Warrant Agreement, the Warrant Shares may also vest in full upon a change of control of PMI and upon the occurrence of certain events set forth in the Warrant Agreement. The Series F Warrant will be exercisable with respect to vested Warrant Shares, in whole or in part, at any time prior to the tenth anniversary of their 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. Additionally, on February 27, 2017, PMI issued to Pinecone Investments LLC, a warrant (the “Series E Warrant”) to purchase 15,277,006 shares of PMI’s Series E-1 Preferred Stock at an exercise price of $0.01 per share. The Series E Warrant is 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 Warrant was issued pursuant to the Warrant Agreement, dated December 16, 2016, between PMI and Colchis Capital Management, L.P., previously described in PMI’s Current Report on Form 8-K as filed with the Commission on December 22, 2016. |
Prosper Funding LLC | |
Entity Information [Line Items] | |
Subsequent Events | Subsequent Events On February 27, 2017, PFL entered into a Loan Purchase Agreement (the “Purchase Agreement”) with PF LoanCo Funding LLC (the “Beneficiary”) and Wilmington Savings Fund Society, FSB, not in its individual capacity but solely in its capacity as trustee (the “Trustee”) of PF LoanCo Trust (the “Purchaser”). The Purchase Agreement sets forth the terms and conditions pursuant to which PFL may sell eligible consumer loans in an aggregate amount of up to $5.0 billion (including certain loans purchased by an affiliate of the Beneficiary prior to the date of the Purchase Agreement (the “Pre-Purchased Loans”)) to the Purchaser for the benefit of the Beneficiary over a two-year period. Under the Purchase Agreement, PFL will be obligated to (i) offer for purchase minimum monthly volumes of eligible loans to the Purchaser, and (ii) deliver a minimum percentage of the monthly volume of such loans that the Purchaser elects to purchase for the benefit of the Beneficiary, if any (together, the “Volume Requirements”). In connection with the Purchase Agreement, on February 27, 2017, PMI entered into a Warrant Agreement with PF WarrantCo Holdings, LP, an affiliate of the Beneficiary (the “Warrant Holder”), and, for certain limited purposes, New Residential Investment Corp. (the “Warrant Agreement”). Pursuant to the Warrant Agreement, PMI issued to Warrant Holder three warrants (together, the “Series F Warrant”) to purchase up to in aggregate 177,720,706 shares of PMI’s Series F Preferred Stock at an exercise price of $0.01 per share (the “Warrant Shares”). Warrant Holder’s right to exercise the Series F Warrant is subject to monthly vesting during the term of the Purchase Agreement based upon the volume of loans Purchaser elects to purchase (if any) in each month, subject to certain cure rights (except that a certain portion of the Series F Warrant will be immediately exercisable as a result of the Pre-Purchased Loans). Additionally, certain portions of the Series F Warrant may automatically vest for a given month in the event that PFL fails to meet its Volume Requirements under the Purchase Agreement for such month. Under the terms of the Warrant Agreement, the Warrant Shares may also vest in full upon a change of control of PMI and upon the occurrence of certain events set forth in the Warrant Agreement. The Series F Warrant will be exercisable with respect to vested Warrant Shares, in whole or in part, at any time prior to the tenth anniversary of their 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. |
Summary of Significant Accoun31
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
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, PHL and BillGuard. 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”). On January 23, 2015 , PMI acquired all of the outstanding limited liability company units of American HealthCare Lending, LLC (“American HealthCare Lending”), a company that operated a patient financing platform, and merged American HealthCare Lending with and into Prosper Healthcare Lending LLC (“PHL”), a newly established entity surviving the merger. Prosper’s consolidated financial statements include PHL’s results of operations and financial position from the date of acquisition forward (see Note 8 – American HealthCare Lending Acquisition ). On October 9, 2015 , PMI acquired all of the outstanding stock of BillGuard, Inc . (“BillGuard”), a company incorporated in Delaware in 2010 that developed applications that help consumers manage their identity, finances and credit. PMI merged BillGuard with and into Beach Merger Sub, Inc., a newly established entity wholly owned by PMI, with BillGuard surviving the merger. Prosper’s consolidated financial statements include BillGuard’s results of operations and financial position from the date of acquisition forward (see Note 9 – BillGuard Acquisition ). |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States 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, valuation of servicing rights, valuation allowance on deferred tax assets, stock-based compensation expense, intangible assets, goodwill, contingent consideration, restructuring liability, convertible preferred stock warrant liability and contingent liabilities. Actual results could differ from those estimates. |
Certain Risks | Certain Risks In the normal course of its business, Prosper encounters significant credit risk. Financial instruments that potentially subject Prosper to significant credit risk consist primarily of cash, cash equivalents, available for sale investments, Borrower Loans held and restricted cash. Prosper places cash, cash equivalents, and restricted cash with high-quality financial institutions and is exposed to credit risk in the event of default by these institutions to the extent the amount recorded on the balance sheet exceeds federally insured amounts. Prosper performs periodic evaluations of the relative credit standing of these financial institutions and has not recognized any losses in earnings from instruments held at these financial institutions. As a lending marketplace, Prosper believes its customers are highly susceptible to uncertainties and negative trends, real or perceived, in the markets driven by, among other factors, general economic conditions in the United States and abroad. These external economic conditions and resulting trends or uncertainties could adversely impact its customers’ ability or desire to participate on its marketplace as borrowers or investors, and consequently could negatively affect its business and results of operations. To the extent that payments on Borrower Loans (including Borrower Loans that have been sold) are not made, interest income and/or servicing income will be reduced. A series of Notes corresponding to a particular Borrower Loan is wholly dependent on the repayment of such Borrower Loan. As a result, Prosper does not bear the credit risk on such Borrower Loan. |
Reclassifications | Reclassifications Due to the early adoption of ASU 2016-09 on January 1, 2016, reclassifications were made to the financing section of the consolidated statements of cash flows to reflect employee taxes paid to a tax authority to satisfy the employer's statutory income tax withholding obligation in relation to the exercise of stock awards. Prior period amounts have been reclassified to conform to the current presentation. |
Consolidation of Variable Interest Entities | Consolidation of Variable Interest Entities The determination of whether to consolidate a variable interest entity (“VIE”) in which we have a variable interest requires a significant amount of analysis and judgment whether we are the primary beneficiary of a VIE via a controlling financial interest in the VIE. A controlling financial interest in a VIE exists if we have both the power to direct the VIE’s activities that most significantly affect the VIE’s economic performance and a potentially significant economic interest in the VIE. The determination of whether an entity is a VIE considers factors, such as (i) whether the entity’s equity investment at risk is insufficient to allow the entity to finance its activities without additional subordinated financial support or (ii) when a holder’s equity investment at risk lacks any of the following characteristics of a controlling financial interest: the direct or indirect ability through voting rights or similar rights to make decisions about a legal entity’s activities that have a significant effect on the entity’s success, the obligation to absorb the expected losses of the entity or the right to receive the expected residual returns of the legal entity. As a result of the nature of the retained servicing rights on the sale of Borrower Loans, we are a variable interest holder in certain special purposes entities that purchase these Borrower Loans. For all of these entities we either do not have the power to direct the activities that most significantly affect the VIE’s economic performance or we do not have a potentially significant economic interest in the VIE. In no case are we the primary beneficiary, therefore, we do not consolidate these entities. Management regularly reviews and reconsiders its previous conclusions regarding the status of an entity as a VIE and whether we are required to consolidate such VIE in the consolidated financial statements. |
Cash and Cash Equivalents | 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, US treasury securities and US agency securities. Cash equivalents are recorded at cost, which approximates fair value. |
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 has on our marketplace that has not yet been invested in Borrower Loans or disbursed to the investor. |
Short Term Investments | Short Term Investments Short Term Investments which are included in Prepaid and Other Assets 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. |
Available for Sale Investments | Available for Sale Investments Available for sale securities consist of commercial paper with terms longer than three months, US treasury securities, US agency securities and corporate debt securities. 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 are 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 |
Fair Value Measurement | Fair Value Measurement Prosper measures the fair value of assets and liabilities in accordance with its fair value hierarchy which prioritizes information used to measure fair value and the effect of fair value measurements on earnings and provides for enhanced disclosures determined by the level within the hierarchy of information used in the valuation. We apply this framework whenever other standards require (or permit) assets or liabilities to be measured at fair value. We define fair value in terms of the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The price used to measure the fair value is not adjusted for transaction costs. The fair value measurement also assumes that the transaction to sell an asset occurs in the principal market for the asset or, in the absence of a principal market, the most advantageous market for the asset. The principal market is the market in which the reporting entity would sell or transfer the asset with the greatest volume and level of activity for the asset. In determining the principal market for an asset or liability, it is assumed that the reporting entity has access to the market as of the measurement date. If no market for the asset exists or if the reporting entity does not have access to the principal market, the reporting entity should use a hypothetical market. Assets and liabilities carried at fair value on the balance sheets are classified among three levels based on the observability of the inputs used to determine fair value: Level 1 — The valuation is based on quoted prices in active markets for identical instruments. Level 2 — The valuation is based on observable inputs such as quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation methodologies for which all significant assumptions are observable in the market. Level 3 — The valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the instrument. Level 3 valuations are typically performed using pricing models, discounted cash flow methodologies, or similar methodologies, which incorporate management’s own estimates of assumptions that market participants would use in pricing the instrument or valuations that require significant management judgment or estimation. Fair values of assets or liabilities are determined based on the fair value hierarchy, which requires an entity to maximize the use of quoted prices and observable inputs and to minimize the use of unobservable inputs when measuring fair value. Various valuation methodologies are utilized, depending on the nature of the financial instrument, including the use of market prices for identical or similar instruments, or discounted cash flow models. When possible, active and observable market data for identical or similar financial instruments are utilized. Alternatively, fair value is determined using assumptions that management believes a market participant would use in pricing the asset or liability. Financial instruments consist principally of Cash and Cash Equivalents, Restricted Cash, Available for Sale Investments, Borrower Loans, Loans Held for Sale, Accounts Receivable, Accounts Payable and Accrued Liabilities, Payable to Investors, Convertible Preferred Stock Warrant Liability and Notes. Servicing Assets and Liabilities are also subject to fair value measurement within the financial statements of Prosper. The estimated fair values of Cash and Cash Equivalents, Restricted Cash, Accounts Receivable, Accounts Payable and Accrued Liabilities, and Payable to Investors approximate their carrying values because of their short term nature. As observable market prices are not available for the Borrower Loans, Loans Held for Sale and Notes, or for similar assets and liabilities, Prosper believes the Borrower Loans, Loans Held for Sale and Notes should be considered Level 3 financial instruments. In a hypothetical transaction as of the measurement date, Prosper believes that differences in the principal marketplace in which the Borrower Loans are originated and the principal marketplace in which Prosper might offer those loans may result in differences between the originated amount of the loans and their fair value as of the transaction date. For Borrower Loans and Loans Held for Sale, the fair value is estimated using discounted cash flow methodologies based upon valuation assumptions including prepayment speeds, default rates and discount rates based on the perceived credit risk within each credit grade. 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% 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. See Note 4 for a roll-forward and further discussion of the significant assumptions used to value Borrower Loans and Notes. |
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 measured at its fair value, which is determined based on the remaining contractual lease rentals reduced by estimated sublease rentals. |
Borrower Loans and Notes | Borrower Loans and Notes Through the Note Channel, Prosper purchases Borrower Loans from WebBank then issues Notes, and holds the Borrower Loans until maturity. The obligation to repay a series of Notes originated through the Note Channel is dependent upon the repayment of the associated Borrower Loan. Borrower Loans and Notes originated through the Note Channel are carried on Prosper’s consolidated balance sheets as assets and liabilities, respectively. We choose to measure certain financial instruments and certain other items at fair value on an instrument-by-instrument basis with unrealized gains and losses on items for which the fair value option has been elected reported in earnings. Management believes that the fair value option is more meaningful for the readers of the financial statements and it allows both the Borrower Loans and Notes to be valued using the same methodology. The fair value election, with respect to an item, may not be revoked once an election is made. Prosper estimates the fair value of such Borrower Loans and Notes using discounted cash flow methodologies adjusted for the expected prepayment, loss, recovery and default rates. The Borrower Loans are not derecognized when a corresponding Note is issued as Prosper maintains the ability to sell the Borrower Loans without the approval of the holders of the corresponding Notes. |
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” revenue. The gain or loss on a loan sale is recorded in “Gain on Sale” 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. On January 1, 2015, Prosper elected to adopt the fair value method to measure the servicing assets and liabilities for all classes of servicing assets and liabilities subsequent to initial recognition. Management believes that the fair value option is more meaningful for readers of the financial statements as it more accurately reflects the expected benefits and obligations of the servicing rights. The adoption of the fair value method for a particular class is irrevocable. Prior to January 1, 2015, Prosper measured the servicing assets and liabilities using the amortized cost method. This change resulted in a $574 thousand decrease to accumulated deficit, a $545 thousand increase in net servicing assets and a $29 thousand decrease in net servicing liabilities. 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, estimated market servicing rates to service such loans, prepayment rates, default rates and the current principal balances of the Borrower Loans. |
Loans Held for Sale | Loans Held for Sale Loans Held for Sale are comprised of Borrower Loans held for short durations and are recorded at fair value. The fair value is estimated using discounted cash flow methodologies based upon a set of valuation assumptions similar to those of other Borrower Loans. We measure Loans Held for Sale at fair value on an instrument-by-instrument basis with unrealized gains and losses on items for which the fair value option has been elected reported in earnings. Management believes that the fair value option is more meaningful for the readers of the financial statements and it allows for the Loans Held for Sale to be measured at fair value similar to Borrower Loans and Notes. The fair value election, with respect to an item, may not be revoked once an election is made. |
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 are stated at cost, less accumulated depreciation and amortization, and are 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, preliminary development efforts are successfully completed, and 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. |
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. Our annual impairment testing date is 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 our operations could result in impairment. We did not recognize any goodwill impairments during the years ended December 31, 2016 and 2015. 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 to ten year periods. The technology and brand name intangible assets are amortized on a straight line basis over three to five years and one year, respectively. Prosper values the customer relationships, technology and brand name assets using the income approach. Significant assumptions in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired users, acquired technology, and brand names from a market participant perspective, useful lives and discount rates. |
Business Combinations | Business Combinations We allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant assumptions in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired users, acquired technology, and brand names from a market participant perspective, useful lives and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which is one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the fair value, whichever comes first, any subsequent adjustments are recorded to earnings. The measurement period has closed for all acquisitions. |
Payable to Investors | Payable to Investors Payable to investors primarily represents our obligation to investors related to cash held in an account for the benefit of investors and payments-in-process received from borrowers. |
Convertible Redeemable Preferred Stock Warrant Liabilities | Convertible Redeemable Preferred Stock Warrant Liabilities Freestanding warrants to acquire shares that may be redeemable are accounted for in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480, Distinguishing Liabilities from Equity "ASC" 480" ) . Under ASC 480, 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 initially measured 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 a component of other expense, net, 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. |
Repurchase Liability for Unvested Restricted Stock Awards | Repurchase Liability for Unvested Restricted Stock Awards Under the terms of PMI’s equity plans, at the Administrator’s discretion, certain equity awards issued to employees may be exercised before they have vested. When this occurs Prosper records a liability for the unvested portion of the exercised option. If the employee’s employment is terminated before all of the shares become vested PMI may repurchase the unvested shares at the original exercise price. The liability is released into equity as the shares become vested. Early exercises of options are not deemed to be substantive exercises for accounting purpose and are excluded from the basic earnings per share calculation and treated as unexercised options shares for stock compensation purposes. |
Loan Trailing Fee | Loan Trailing Fee 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 are 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 Change in Fair Value of Borrower Loans, Loans Held for Sale and Notes, 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 fees and net interest income earned. Fees include transaction fees for our services performed on behalf of WebBank to originate a loan and servicing fees paid by investors. We also have other smaller sources of revenue reported as other revenue, this includes referral fees, securitization fees and subscription fees. Transaction Fees Prosper earns a transaction fee upon the successful origination of all Borrower Loans facilitated through Prosper’s marketplace. Prosper receives payments from WebBank as compensation for the activities Prosper performs on behalf of WebBank. 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 such 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. Historically the servicing fee was set at 1.0% per annum and was increased to 1.075% per annum in August 2016 for loans originated after July 2016. The servicing fee compensates Prosper for the costs incurred in servicing the Borrower Loan, including managing payments from borrowers, 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 is retained for the servicing of Borrower Loans by WebBank. Additionally, Prosper recognizes gains or losses on the sale of Borrower Loans when it sells Borrower Loans to third parties. Gains or losses on sales of Borrower Loans that are recognized at the time of sale and are determined by the difference between the net sales proceeds, fair value of any servicing rights retained and the carrying value of the Borrower Loans sold. Interest Income on Borrower Loans, and Interest Expense on Notes 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. |
Advertising Costs | Advertising Costs Advertising 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 We determine the fair value of our 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 our common stock, as well as 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. We recognize compensation expense for our 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. We estimate future forfeitures at the date of grant and revise the estimates, if necessary, in subsequent periods if actual forfeitures differ from those 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 nonemployees 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 our 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. |
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 currently not undergoing any income tax examinations. Due to the net operating loss, generally all tax years remain open. We recognize benefits from uncertain tax positions only if we believe 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 (Income) Expense, net | Other (Income) Expense, net Other (income) expense, net includes interest income from available for sale securities, accretion on available for sale securities, changes in fair value of contingent liabilities, realized gains and losses on the sale of available for sale securities, changes in fair value of convertible preferred stock warrant liabilities and contract termination costs that are expected to be non-recurring and not part of restructuring activities. |
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 Income 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 our Consolidated Balance Sheet. If we have 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 income. Prosper monitors its investment portfolio for potential impairment on a quarterly basis. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, as part of its ongoing efforts to assist in the convergence of US GAAP and International Financial Reporting Standards (“IFRS”), the “FASB” issued Accounting Standards Update (“ASU”) 2014-9, “ Revenue from Contracts with Customers .” The new guidance sets forth a new five-step revenue recognition model which replaces the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically existed in U.S. GAAP. The underlying principle of the new standard is that a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects in exchange for the goods or services. The standard also requires more detailed disclosures and provides additional guidance for transactions that were not addressed completely in the prior accounting guidance. The standard will be effective for Prosper in the first quarter of fiscal 2018. In August 2015, the FASB issued ASU No. 2015-14, which amended the standard to provide a one-year deferral of the effective date, as well as providing the option to early adopt the standard on the original effective date. Accordingly, Prosper may adopt the standard in either Prosper’s fiscal year ending December 31, 2017 or 2018. Prosper intends to adopt the guidance for Prosper's fiscal year ending December 31, 2018. The guidance can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. Prosper expects to adopt this ASU on a modified retrospective basis in the first quarter of fiscal 2018. Our evaluation of this ASU is ongoing and not complete. The FASB has issued and may issue in the future, interpretative guidance, which may cause our evaluation to change. Our preliminary results indicate that transaction fees are included in the scope of the new guidance, while servicing fees and gain or loss on the sale of loans remain within the scope of ASC topic 860, Transfers and Servicing . While we anticipate some changes to revenue recognition for certain customer contracts, Prosper does not currently believe that this ASU will have a material effect on our Consolidated Financial Statements. In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements - Going Concern (Subtopic 205-40); Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” which requires management of a company to evaluate whether there is substantial doubt about the company’s ability to continue as a going concern. This ASU is effective for the annual reporting period ending after December 15, 2016, and for interim and annual reporting periods thereafter, with early adoption permitted. Prosper adopted this guidance on January 1, 2016, and the adoption of this standard did not have a material impact on Prosper’s financial statements. In November 2014, the FASB issued ASU 2014-16, Derivatives and Hedging (Topic 815): Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity to eliminate the use of different methods in practice and thereby reduce existing diversity in the accounting for hybrid financial instruments issued in the form of a share. For hybrid financial instruments issued in the form of a share, an entity should determine the nature of the contract by considering the economic characteristics and risks of the entire hybrid financial instrument. The existence or omission of any single term or feature does not necessarily determine the economic characteristics and risks of the host contract. This standard will be effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2015. Prosper adopted this guidance on January 1, 2016, and the adoption of this standard did not have a material impact on Prosper’s financial statements. In February 2015, the FASB issued ASU 2015-2, " Consolidation (Topic 810): Amendments to the Consolidation Analysis. " ASU 2015-2 affects reporting entities that are required to evaluate whether they should consolidate certain legal entities. ASU 2015-2 is effective for periods beginning after December 15, 2015 with early adoption permitted. Prosper has decided to early adopt this guidance effective January 1, 2015, and the adoption of this standard had no impact on Prosper’s financial statements. In April 2015, the FASB issued ASU 2015-5 “ Customers’ Accounting for Fees Paid in Cloud Computing Arrangement ”, which will be effective for the annual reporting period beginning after December 15, 2015. The guidance changes what a customer must consider in determining whether a cloud computing arrangement contains a software license. If the arrangement contains a software license, the customer would account for the fees related to the software license element in accordance with guidance related to internal use software; if the arrangement does not contain a software license, the customer would account for the arrangement as a service contract. Prosper adopted this guidance on January 1, 2016, and the adoption of this standard did not have a material impact on Prosper’s financial statements. In September 2015, the FASB issued ASU 2015-16, " Simplifying the Accounting for Measurement-Period Adjustments". The new guidance simplifies the accounting for measurement period adjustments in connection with business combinations by requiring that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. This guidance is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years, with early adoption permitted. Prosper adopted this guidance on January 1, 2016, and the adoption of this standard did not have a material impact on Prosper’s financial statements. In January 2016, the FASB issued ASU 2016-1, " Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities" , which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. This guidance will be effective for us in the first quarter of our fiscal year 2019, and early adoption is not permitted. Prosper is currently evaluating the impact that this guidance will have on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-2, " 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. This guidance will be effective for us in the first quarter of our fiscal year 2019, and early adoption is permitted. Prosper is currently evaluating the impact that this guidance will have on its consolidated financial statements, however we do expect that this guidance will have a material impact on Prosper's consolidated financial statements. As of December 31, 2016, Prosper has a total of $59.7 million in non-cancelable operating lease commitments. In March 2016, the FASB issued ASU 2016-09, " Improvements to Employee Share-Based Payment Accounting (Topic 718)" . This guidance makes several modifications to Topic 718 related to the accounting for forfeitures, employer tax withholding on share-based compensation and the financial statement presentation of excess tax benefits or deficiencies. ASU 2016-09 also clarifies the statement of cash flows presentation for certain components of share-based awards. This guidance will be effective for us in the first quarter of our fiscal year 2017, and early adoption is permitted. Prosper has decided to early adopt this guidance effective January 1, 2016, the adoption of this standard did not have a material impact on Prosper’s consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, “ Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.” The standard provides guidance for eight targeted changes with respect to how cash receipts and cash payments are classified in the statements of cash flows, with the objective of reducing diversity in practice. This guidance will be effective for Prosper in the first quarter of our fiscal year 2018, and early adoption is permitted. Prosper is currently evaluating the impacts the adoption of this accounting standard will have on Prosper's statement of cash flows. In October 2016, the FASB issued ASU No. 2016-16, "Income Taxes (Topic 740): Intra-Entity Transfers Other than Inventory (ASU 2016-16)" , which requires companies to recognize the income-tax consequences of an intra-entity transfer of an asset other than inventory. This guidance will be effective for us in the first quarter of 2018, with the option to adopt it in the first quarter of 2017. Prosper is currently evaluating the impact that this guidance will have on its consolidated financial statements, however we do not expect the standard to have a material impact on our consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash (ASU 2016-18)" , which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This guidance will be effective for us in the first quarter of 2018 and early adoption is permitted. Prosper is currently evaluating the effect that this guidance will have on our consolidated financial statements and related disclosures. 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 is currently evaluating the impact of this accounting standard update 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 PFL and its wholly-owned subsidiary PAH. All intercompany balances and transactions between PFL 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 accounting principles generally accepted in the United States 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, repurchase and indemnification obligation, 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 from those estimates. |
Certain Risks | Certain Risks In the normal course of its business, Prosper encounters significant credit risk. Financial instruments that potentially subject Prosper Funding to significant credit risk consist primarily of cash, cash equivalents, borrower loans held and restricted cash. Prosper Funding places cash, cash equivalents and restricted cash with high-quality financial institutions and is exposed to credit risk in the event of default by these institutions to the extent the amount recorded on the balance sheet exceeds federally insured amounts. Prosper Funding also performs periodic evaluations of the relative credit standing of these financial institutions and has not recognized any losses in earnings from instruments held at these financial institutions. As a lending marketplace, Prosper Funding believes its customers are highly susceptible to uncertainties and negative trends, real or perceived, in the markets driven by, among other factors, general economic conditions in the United States and abroad. These external economic conditions and resulting trends or uncertainties could adversely impact its customers’ ability or desire to participate on its marketplace as borrowers or investors, and consequently could negatively affect its business and results of operations. To the extent that Borrower Loan (including Borrower Loans that have been sold) payments are not made, servicing income will be reduced. A group of Notes corresponding to a particular Borrower Loan is wholly dependent on the repayment of such Borrower Loan. As a result, Prosper Funding does not bear the credit risk on such Borrower Loan. |
Consolidation of Variable Interest Entities | Consolidation of Variable Interest Entities The determination of whether to consolidate a variable interest entity (“VIE”) in which we have a variable interest requires a significant amount of analysis and judgment whether we are the primary beneficiary of a VIE via a controlling financial interest in the VIE. A controlling financial interest in a VIE exists if we have both the power to direct the VIE’s activities that most significantly affect the VIE’s economic performance and a potentially significant economic interest in the VIE. The determination of whether an entity is a VIE considers factors, such as (i) whether the entity’s equity investment at risk is insufficient to allow the entity to finance its activities without additional subordinated financial support or (ii) when a holder’s equity investment at risk lacks any of the following characteristics of a controlling financial interest: the direct or indirect ability through voting rights or similar rights to make decisions about a legal entity’s activities that have a significant effect on the entity’s success, the obligation to absorb the expected losses of the entity or the right to receive the expected residual returns of the legal entity. As a result of the nature of the retained servicing rights on the sale of Borrower Loans, we are a variable interest holder in certain special purposes entities that purchase these Borrower Loans. For all of these entities we either do not have the power to direct the activities that most significantly affect the VIE’s economic performance or we do not have a potentially significant economic interest in the VIE. In no case are we the primary beneficiary, therefore, we do not consolidate these entities. . Management regularly reviews and reconsiders its previous conclusions regarding the status of an entity as a VIE and whether we are required to consolidate such VIE in the consolidated financial statements. |
Cash and Cash Equivalents | 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, US treasury securities and US agency securities. Cash equivalents are recorded at cost, which approximates fair value. |
Restricted Cash | Restricted Cash Restricted cash consists primarily of cash deposits and short term certificates of deposit held as collateral as required for loan funding and servicing activities, and cash that investors or Prosper Funding has on the platform 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. |
Fair Value Measurement | Fair Value Measurement Prosper Funding measures the fair value of assets and liabilities in accordance with its fair value hierarchy which prioritizes information used to measure fair value and the effect of fair value measurements on earnings and provides for enhanced disclosures determined by the level within the hierarchy of information used in the valuation. We apply this framework whenever other standards require (or permit) assets or liabilities to be measured at fair value. We define fair value in terms of the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The price used to measure the fair value is not adjusted for transaction costs. Under ASC Topic 820, the fair value measurement also assumes that the transaction to sell an asset occurs in the principal market for the asset or, in the absence of a principal market, the most advantageous market for the asset. The principal market is the market in which the reporting entity would sell or transfer the asset with the greatest volume and level of activity for the asset. In determining the principal market for an asset or liability under ASC Topic 820, it is assumed that the reporting entity has access to the market as of the measurement date. If no market for the asset exists or if the reporting entity does not have access to the principal market, the reporting entity should use a hypothetical market. Under ASC Topic 820, assets and liabilities carried at fair value on the balance sheets are classified among three levels based on the observability of the inputs used to determine fair value: Level 1 — The valuation is based on quoted prices in active markets for identical instruments. Level 2 — The valuation is based on observable inputs such as quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation methodologies for which all significant assumptions are observable in the market. Level 3 — The valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the instrument. Level 3 valuations are typically performed using pricing models, discounted cash flow methodologies, or similar methodologies, which incorporate management’s own estimates of assumptions that market participants would use in pricing the instrument or valuations that require significant management judgment or estimation. Fair values of assets or liabilities are determined based on the fair value hierarchy established in ASC Topic 820, which requires an entity to maximize the use of quoted prices and observable inputs and to minimize the use of unobservable inputs when measuring fair value. Various valuation methodologies are utilized, depending on the nature of the financial instrument, including the use of market prices for identical or similar instruments, or discounted cash flow models. When possible, active and observable market data for identical or similar financial instruments are utilized. Alternatively, fair value is determined using assumptions that management believes a market participant would use in pricing the asset or liability. Financial instruments consist principally of cash and cash equivalents, restricted cash, Borrower Loans, accounts payable and accrued liabilities, and Notes. Servicing assets and liabilities are also subject to fair value measurement within the financial statements of PFL. The estimated fair values of cash and cash equivalents, restricted cash, accounts payable and accrued liabilities approximate their carrying values because of their short term nature. As observable market prices are not available for the Borrower Loans, Loans Held for Sale and Notes, Prosper Funding believes the Borrower Loans, Loans Held for Sale and Notes should be considered Level 3 financial instruments under ASC Topic 820. In a hypothetical transaction as of the measurement date, Prosper Funding believes that differences in the principal marketplace in which the Borrower Loans are originated and the principal marketplace in which Prosper Funding might offer those loans may result in differences between the originated amount of the loans and their fair value as of the transaction date. For Borrower Loans and Loans Held for Sale, the fair value is estimated using discounted cash flow methodologies based upon valuation assumptions including prepayment speeds, default rates and discount rates based on the perceived credit risk within each credit grade. The obligation to pay principal and interest on any Note 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 lenders that are dependent upon borrower payments. As such, the fair value of a group 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 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 of 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. See Note 4 for a roll-forward and further discussion of the significant assumptions used to value Borrower Loans and Notes. |
Borrower Loans and Notes | Borrower Loans and Notes Through the Note Channel, Prosper Funding purchases Borrower Loans from WebBank then issues Notes 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 Loan. Borrower Loans originated and Notes issued through the Note Channel are carried on Prosper Funding’s consolidated balance sheets as assets and liabilities, respectively. Prosper Funding has adopted the provisions of ASC Topic 825, Financial Instruments ( “ASC Topic 825” ). ASC Topic 825 permits companies to choose to measure certain financial instruments and certain other items at fair value on an instrument-by-instrument basis with unrealized gains and losses on items for which the fair value option has been elected reported in earnings. Management believes that the fair value option is more meaningful for the readers of the financial statements and it allows both the Borrower Loans and Notes to be valued using the same methodology. The fair value election, with respect to an item, may not be revoked once an election is made. Prosper Funding estimates the fair value of such Borrower Loans and Notes using discounted cash flow methodologies adjusted for the expected payment, loss, recovery and default rates. The Borrower Loans are not derecognized when a corresponding Note is issued as Prosper Funding maintains the ability to sell the Borrower Loans without the approval of the holders in the corresponding Notes. |
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 “Servicing Fees” revenue. 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 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. On January 1, 2015, Prosper elected to adopt the fair value method to measure the servicing assets and liabilities for all classes of servicing assets and liabilities subsequent to initial recognition. ASC Subtopic 860-50, Servicing Assets and Liabilities, allows the adoption of the fair value method at the beginning of any fiscal year. The adoption of the fair value method for a particular class is irrevocable. Prior to January 1, 2015, Prosper measured the servicing assets and liabilities using the amortized cost method. This change resulted in a $428 thousand decrease to accumulated deficit, a $399 thousand increase in net servicing assets and a $29 thousand decrease in net servicing liabilities. 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. |
Loans Held for Sale | Loans Held for Sale Loans Held for Sale are comprised of Borrower Loans held for short durations and are recorded at fair value. The fair value is estimated using discounted cash flow methodologies based upon a set of valuation assumptions similar to those of other Borrower Loans. We measure Loans Held for Sale at fair value on an instrument-by-instrument basis with unrealized gains and losses on items for which the fair value option has been elected reported in earnings. Management believes that the fair value option is more meaningful for the readers of the financial statements and it allows for the Loans Held for Sale to be measured at fair value similar to Borrower Loans and Notes. The fair value election, with respect to an item, may not be revoked once an election is made. |
Software and Website Development | Software and Website Development Software and Website Development represents the software and website that PMI has transferred to Prosper Funding. Prosper Funding does not develop any of its own software or website. Software and website are included in property and equipment and amortized to expense using the straight-line method over their expected lives which is generally one to five years. Prosper Funding evaluates its software assets 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 to the future net undiscounted cash flows expected to be generated by the asset. 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. |
Payable to Investors | Payable to Investors Payable to Investors primarily represents our 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 | Loan Trailing Fee |
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. We also have other smaller sources of revenue reported as other revenue, which includes 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 through the Whole Loan Channel typically pay Prosper Funding 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 Funding for the costs incurred in servicing the related loan, including managing payments from borrowers, payments to investors and maintaining investors’ account portfolios. Prosper Funding records servicing fees paid by Borrower Loan investors as a component of operating revenue when received. Gain on Sale of Borrower Loans Prosper Funding recognizes gains or losses on the sale of Borrower Loans when it is retained for the servicing of Borrower Loans by WebBank. Additionally, Prosper Funding recognizes gains or losses on the sale of Borrower Loans when it sells Borrower Loans to third parties. Gains or losses on sales of Borrower Loans that are recognized at the time of sale and are determined by the difference between the net sales proceeds, fair value of any servicing rights retained and the carrying value of the Borrower Loans sold. 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 an 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. |
Other (Income) Expense, net | Other Expense Other expense, net includes contract termination costs that are expected to be non-recurring and not part of restructuring activities. |
Comprehensive Income | Comprehensive Income There is no comprehensive income (loss) other than the net income (loss) disclosed in the consolidated statements of operations. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, as part of its ongoing efforts to assist in the convergence of US GAAP and International Financial Reporting Standards (“IFRS”), the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-9, “ Revenue from Contracts with Customers .” The new guidance sets forth a new five-step revenue recognition model which replaces the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically existed in U.S. GAAP. The underlying principle of the new standard is that a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects in exchange for the goods or services. The standard also requires more detailed disclosures and provides additional guidance for transactions that were not addressed completely in the prior accounting guidance. The standard will be effective for Prosper Funding in the first quarter of fiscal 2018. In August 2015, the FASB issued ASU No. 2015-14, which amended the standard to provide a one-year deferral of the effective date, as well as providing the option to early adopt the standard on the original effective date. Accordingly, Prosper Funding may adopt the standard in either Prosper Funding’s fiscal year ending December 31, 2017 or 2018. The guidance can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. Prosper Funding expects to adopt this ASU on a modified retrospective basis in the first quarter of fiscal 2018. Our evaluation of this ASU is ongoing and not complete. The FASB has issued and may issue in the future, interpretative guidance, which may cause our evaluation to change. Our preliminary results indicate that administration fees are included in the scope of the new guidance, while servicing fees and gain or loss on the sale of loans remain within the scope of ASC topic 860, Transfers and Servicing . While we anticipate some changes to revenue recognition for certain customer contracts, Prosper Funding does not currently believe that this ASU will have a material effect on our Consolidated Financial Statements. In November 2014, the FASB issued ASU 2014-16, Derivatives and Hedging (Topic 815): Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity to eliminate the use of different methods in practice and thereby reduce existing diversity in the accounting for hybrid financial instruments issued in the form of a share. For hybrid financial instruments issued in the form of a share, an entity should determine the nature of the contract by considering the economic characteristics and risks of the entire hybrid financial instrument. The existence or omission of any single term or feature does not necessarily determine the economic characteristics and risks of the host contract. This standard will be effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. Prosper Funding adopted this guidance on January 1, 2016, and the adoption of this standard did not have a material impact on Prosper Funding’s financial statements. In February 2015, the FASB issued ASU 2015-2, " Consolidation (Topic 810): Amendments to the Consolidation Analysis. " ASU 2015-2 affects reporting entities that are required to evaluate whether they should consolidate certain legal entities. ASU 2015-2 is effective for periods beginning after December 15, 2015 with early adoption permitted. Prosper Funding has decided to early adopt this guidance effective January 1, 2015, and the adoption of this standard had no impact on Prosper Funding’s consolidated financial statements. In April 2015, the FASB issued ASU 2015-5 “ Customers’ Accounting for Fees Paid in Cloud Computing Arrangement ”, which will be effective for the annual reporting period beginning after December 15, 2015. The guidance changes what a customer must consider in determining whether a cloud computing arrangement contains a software license. If the arrangement contains a software license, the customer would account for the fees related to the software license element in accordance with guidance related to internal use software; if the arrangement does not contain a software license, the customer would account for the arrangement as a service contract. Prosper Funding is currently assessing the potential impact on its consolidated financial statements from adopting this new guidance. In January 2016, the FASB issued ASU 2016-1, " Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities" , which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. This guidance will be effective for us in the first quarter of our fiscal year 2019, and early adoption is not permitted. Prosper Funding is currently evaluating the impact that this guidance will have on our consolidated financial statements. In August 2016, the FASB issued A SU 2016-15 , “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. ” The standard provides guidance for eight targeted changes with respect to how cash receipts and cash payments are classified in the statements of cash flows, with the objective of reducing diversity in practice. This guidance will be effective for Prosper in the first quarter of our fiscal year 2018, and early adoption is permitted. Prosper Funding is currently evaluating the impacts the adoption of this accounting standard will have on Prosper Funding's cash flows. In November 2016, the FASB issued ASU 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash (ASU 2016-18)" , which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This guidance will be effective for us in the first quarter of 2018 and early adoption is permitted. Prosper Funding is currently evaluating the effect that this guidance will have on our consolidated financial statements and related disclosures. |
Summary of Significant Accoun32
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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, 2016 | |
Entity Information [Line Items] | |
Property and Equipment, Net | Property and equipment consist of the following (in thousands): December 31, 2016 2015 Property and equipment: Computer equipment $ 14,107 $ 10,522 Internal-use software and website development costs 16,750 10,990 Office equipment and furniture 3,010 2,442 Leasehold improvements 7,038 5,719 Assets not yet placed in service 1,222 3,242 Property and equipment 42,127 32,915 Less accumulated depreciation and amortization (17,274 ) (7,950 ) Total property and equipment, net $ 24,853 $ 24,965 |
Prosper Funding LLC | |
Entity Information [Line Items] | |
Property and Equipment, Net | Property and equipment consist of the following (in thousands): December 31, 2016 2015 Property and equipment: Internal-use software and web site development costs $ 16,749 $ 10,990 Property and equipment 16,749 10,990 Less accumulated depreciation and amortization (6,654 ) (2,571 ) Total property and equipment, net $ 10,095 $ 8,419 |
Borrower Loans, Loans Held fo34
Borrower Loans, Loans Held for Sale, and Notes Held at Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Entity Information [Line Items] | |
Borrower Loans, Notes and Loans Held for Sale | At December 31, 2016 and 2015 , Borrower Loans, Notes and Loans Held for Sale (in thousands) were: Borrower Loans Notes Loans Held for Sale December 31, 2016 December 31, 2015 December 31, 2016 December 31, 2015 December 31, 2016 December 31, 2015 Aggregate principal balance outstanding $ 319,143 $ 296,945 $ (323,358 ) $ (294,331 ) $ 641 $ 42 Fair value adjustments (3,516 ) 328 7,122 (3,074 ) (17 ) (10 ) Fair value $ 315,627 $ 297,273 $ (316,236 ) $ (297,405 ) $ 624 $ 32 |
Prosper Funding LLC | |
Entity Information [Line Items] | |
Borrower Loans, Notes and Loans Held for Sale | At December 31, 2016 and 2015 , Borrower Loans, Notes and Loans Held for Sale (in thousands) were: Borrower Loans Notes Loans Held for Sale December 31, 2016 December 31, 2015 December 31, 2016 December 31, 2015 December 31, 2016 December 31, 2015 Aggregate principal balance outstanding $ 319,143 $ 296,945 $ (323,358 ) $ (294,331 ) $ 641 $ 42 Fair value adjustments (3,516 ) 328 7,122 (3,074 ) (17 ) (10 ) Fair value $ 315,627 $ 297,273 $ (316,236 ) $ (297,405 ) $ 624 $ 32 |
Available for Sale Investment35
Available for Sale Investments, at Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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 as of December 31, 2016 and December 31, 2015 , are as follows (in thousands): December 31, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Fixed maturity securities: Corporate debt securities $ 21,762 $ 1 $ (10 ) $ 21,753 US Treasury securities 8,516 3 (3 ) 8,516 Agency bonds 2,499 1 — 2,500 Total Available for Sale Investments $ 32,777 $ 5 $ (13 ) $ 32,769 December 31, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Fixed maturity securities: Corporate debt securities $ 50,327 $ 1 $ (94 ) $ 50,234 Commercial paper 9,493 — — 9,493 US Treasury securities 8,512 — (41 ) 8,471 Agency bonds 2,499 — (8 ) 2,491 Total fixed maturity securities 70,831 1 (143 ) 70,689 Short term bond funds 2,500 — (2 ) 2,498 Total Available for Sale Investments $ 73,331 $ 1 $ (145 ) $ 73,187 |
Summary of Securities Available for Sale of Continuous Unrealized Loss | A summary of available for sale investments with unrealized losses as of December 31, 2016 , aggregated by category and period of continuous unrealized loss, is as follows (in thousands): Less than 12 months 12 months or longer Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Fixed maturity securities: Corporate debt securities $ — $ — $ 14,651 $ (10 ) $ 14,651 $ (10 ) U.S. treasury securities — — 4,499 (3 ) 4,499 (3 ) Total Investments with Unrealized Losses $ — $ — $ 19,150 $ (13 ) $ 19,150 $ (13 ) |
Schedule of Maturities of Securities Available for Sale | The maturities of available for sale investments at December 31, 2016 , are as follows (in thousands): Within 1 year After 1 year through 5 years After 5 years to 10 years After 10 years Total Corporate debt securities 21,753 — — — 21,753 US Treasury securities 8,516 — — — 8,516 Agency bonds 2,500 — — — 2,500 Total Fair Value $ 32,769 $ — $ — $ — $ 32,769 Total Amortized Cost $ 32,777 $ — $ — $ — $ 32,777 |
Fair Value of Assets and Liab36
Fair Value of Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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, 2016 Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Assets: Borrower Loans $ — $ — $ 315,627 $ 315,627 Loans Held for Sale — — 624 624 Available for Sale Investments, at Fair Value — 32,769 — 32,769 Servicing Assets — — 12,786 12,786 Total Assets — 32,769 329,037 361,806 Liabilities: Notes $ — $ — $ 316,236 $ 316,236 Servicing Liabilities — — 198 198 Convertible Preferred Stock Warrant Liability — — 21,711 21,711 Loan Trailing Fee Liability — — 665 665 Total Liabilities $ — $ — $ 338,810 $ 338,810 December 31, 2015 Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Assets: Borrower Loans $ — $ — $ 297,273 $ 297,273 Loans Held for Sale — — 32 32 Available for Sale Investments, at Fair Value — 73,187 — 73,187 Servicing Assets — — 14,363 14,363 Total Assets — 73,187 311,668 384,855 Liabilities: Notes $ — $ — $ 297,405 $ 297,405 Servicing Liabilities $ — $ — $ 484 $ 484 Contingent Consideration $ — $ — $ 4,801 $ 4,801 Total Liabilities $ — $ — $ 302,690 $ 302,690 |
Quantitative Information About Significant Unobservable Inputs | Borrower Loans, Loans Held for Sale and Notes: Range Unobservable Input December 31, 2016 December 31, 2015 Discount rate 4.0% - 15.9% 4.3% - 14.5% Default rate 1.7% - 14.9% 1.4% - 14.4% |
Significant Unobservable Inputs Fair Value | Servicing Assets and Liabilities: Range Unobservable Input December 31, 2016 December 31, 2015 Discount rate 15% - 25% 15% - 25% Default rate 1.5% - 15.2% 1.2% - 14.7% Prepayment rate 13.6% - 26.6% 14.3% - 25.6% 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, 2016 and 2015, the market rate for collection fees and non-sufficient fund fees was assumed to be 12 basis points and 8 basis points for a weighted-average total market servicing rate of 74.5 basis points and 70.5 basis points respectively. |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following tables present additional information about level 3 Borrower Loans, Loans Held for Sale and Notes measured at fair value on a recurring basis (in thousands): Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Borrower Loans Notes Loans Held for Sale Total Balance at January 1, 2016 $ 297,273 $ (297,405 ) $ 32 $ (100 ) Purchase of Borrower Loans/Issuance of Notes 217,582 (217,767 ) 1,979,952 $ 1,979,767 Principal repayments (171,195 ) 173,958 (447 ) $ 2,316 Borrower Loans sold to third parties (2,515 ) — (1,978,905 ) $ (1,981,420 ) Other changes 416 (591 ) (1 ) $ (176 ) Change in fair value (25,934 ) 25,569 (7 ) $ (372 ) Balance at December 31, 2016 $ 315,627 $ (316,236 ) $ 624 $ 15 Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Borrower Loans Notes Loans Held for Sale Total Balance at January 1, 2015 $ 273,243 $ (273,783 ) $ 8,463 $ 7,923 Purchase of Borrower Loans/Issuance of Notes 197,436 (197,228 ) 3,517,467 3,517,675 Principal repayments (151,038 ) 151,025 (552 ) (565 ) Borrower Loans sold to third parties (855 ) 813 (3,525,207 ) (3,525,249 ) Other changes 81 (6 ) (18 ) 57 Change in fair value (21,594 ) 21,774 (121 ) 59 Balance at December 31, 2015 $ 297,273 $ (297,405 ) $ 32 $ (100 ) |
Schedule of Servicing Assets and Liabilities Measured at Fair Value | The following table presents additional information about the Level 3 servicing assets and liabilities measured at fair value on a recurring basis (in thousands): Servicing Assets Servicing Liabilities Amortized Cost at January 1, 2015 $ 4,163 $ 624 Adjustments to adopt fair value measurement $ 545 $ (29 ) Fair Value at January 1, 2015 $ 4,708 $ 595 Additions 14,909 283 Less: Changes in fair value (5,254 ) (394 ) Fair Value at January 1, 2016 14,363 484 Additions 9,833 9 Less: Changes in fair value (11,410 ) (295 ) Fair Value at December 31, 2016 $ 12,786 $ 198 |
Level 3 Liabilities Measured on Recurring Basis | The following table presents additional information about level 3 Preferred Stock Warrant Liability measured at fair value on a recurring basis (in thousands): Balance at January 1, 2016 $ — Add Issuances of Preferred Stock Warrant 21,704 Change in fair value of the preferred stock warrant liability 7 Balance at December 31, 2016 $ 21,711 The following table presents additional information about level 3 Loan Trailing Fee Liability measured at fair value on a recurring basis (in thousands): Balance at January 1, 2016 $ — Issuances 647 Cash payment of Loan Trailing Fee (21 ) Change in fair value 39 Balance at December 31, 2016 $ 665 |
Fair Value Assumptions for Loans Held for Sale, Borrower Loans and Notes | Key economic assumptions and the sensitivity of the current fair value to immediate changes in those assumptions at December 31, 2016 for Borrower Loans, Loans Held for Sale and Notes originated through the Note Channel are presented in the following table (in thousands, except percentages): Borrower Loans / Loans Held for Sale Notes Discount rate assumption: 7.30 % * 7.30 % * Resulting fair value from: 100 basis point increase $ 312,424 $ 313,022 200 basis point increase 309,302 309,888 Resulting fair value from: 100 basis point decrease $ 318,913 $ 319,535 200 basis point decrease 322,288 322,921 Default rate assumption: 11.94 % * 11.94 % * Resulting fair value from: 100 basis point increase $ 312,171 $ 312,759 200 basis point increase 308,833 309,401 Resulting fair value from: 100 basis point decrease $ 319,112 $ 319,743 200 basis point decrease 322,640 323,294 * Represents weighted average assumptions considering all credit grades. |
Schedule of Prosper's and Prosper Funding's Estimated Fair Value of Servicing Assets and Liabilities | The following table presents the estimated impact on Prosper’s estimated fair value of servicing assets and liabilities, calculated using different market servicing rates and different default rates as of December 31, 2016 (in thousands, except percentages). Servicing Assets Servicing Liabilities Weighted average market servicing rate assumptions 0.625 % 0.625 % Resulting fair value from: Market servicing rate increase to 0.65% $ 11,918 $ 217 Market servicing rate decrease to 0.60% $ 13,654 $ 177 Weighted average prepayment assumptions 20.02 % 20.02 % Resulting fair value from: Applying a 1.1 multiplier to prepayment rate $ 12,581 $ 194 Applying a 0.9 multiplier to prepayment rate $ 12,992 $ 201 Weighted average default assumptions 11.59 % 11.59 % Resulting fair value from: Applying a 1.1 multiplier to default rate $ 12,592 $ 198 Applying a 0.9 multiplier to default rate $ 12,984 $ 198 |
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, 2016 Level 1 Inputs Level 2 Inputs Level 3 Inputs Fair Value Assets Borrower Loans $ — $ — $ 315,627 $ 315,627 Servicing Assets — — 12,461 $ 12,461 Loans Held for Sale — — 624 624 Total Assets — — 328,712 328,712 Liabilities Notes $ — $ — $ 316,236 $ 316,236 Servicing Liabilities — — 198 198 Loan Trailing Fee Liability — — 665 665 Total Liabilities $ — $ — $ 317,099 $ 317,099 December 31, 2015 Level 1 Inputs Level 2 Inputs Level 3 Inputs Fair Value Assets Borrower Loans $ — $ — $ 297,273 $ 297,273 Servicing Assets — — 13,605 13,605 Loans Held for Sale — — 32 32 Total Assets — — 310,910 310,910 Liabilities Notes $ — $ — $ 297,405 $ 297,405 Servicing Liabilities — — 484 484 Total Liabilities $ — $ — $ 297,889 $ 297,889 |
Quantitative Information About Significant Unobservable Inputs | The following tables present quantitative information about the significant unobservable inputs used for Prosper Funding’s level 3 fair value measurements at December 31, 2016 : Borrower Loans, Loans Held for Sale and Notes: Range Unobservable Input December 31, 2016 December 31, 2015 Discount rate 4.0% - 15.9% 4.3% - 14.5% Default rate 1.7% - 14.9% 1.4% - 14.4% |
Significant Unobservable Inputs Fair Value | Servicing Assets and Liabilities: Range Unobservable Input December 31, 2016 December 31, 2015 Discount rate 15% - 25% 15% - 25% Default rate 1.5% - 15.2% 1.2% - 14.7% Prepayment rate 13.6% - 26.6% 14.3% - 25.6% 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, 2016 and 2015, the market rate for collection fees and non-sufficient funds fees was assumed to be 12 basis points and 8 basis points for a weighted-average total market servicing rate of 74.5 basis points and 70.5 basis points respectively. |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following tables present additional information about level 3 Borrower Loans, Loans Held for Sale and Notes measured at fair value on a recurring basis (in thousands): Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Borrower Loans Notes Loans Held for Sale Total Balance at January 1, 2016 $ 297,273 $ (297,405 ) $ 32 $ (100 ) Purchase of Borrower Loans/Issuance of Notes 217,582 (217,767 ) 1,979,952 1,979,767 Principal repayments (171,195 ) 173,958 (447 ) 2,316 Borrower loans sold to third parties (2,515 ) — (1,978,905 ) (1,981,420 ) Other changes 416 (591 ) (1 ) (176 ) Change in fair value (25,934 ) 25,569 (7 ) (372 ) Balance at December 31, 2016 $ 315,627 $ (316,236 ) $ 624 $ 15 Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Borrower Loans Notes Loans Held for Sale Total Balance at January 1, 2015 $ 273,243 $ (273,783 ) $ 8,463 $ 7,923 Purchase of Borrower Loans/Issuance of Notes 197,436 (197,228 ) 3,517,467 3,517,675 Principal repayments (151,038 ) 151,025 (552 ) (565 ) Borrower loans sold to third parties (855 ) 813 (3,525,207 ) (3,525,249 ) Other changes 81 (6 ) (18 ) 57 Change in fair value (21,594 ) 21,774 (121 ) 59 Balance at December 31, 2015 $ 297,273 $ (297,405 ) $ 32 $ (100 ) |
Schedule of Servicing Assets and Liabilities Measured at Fair Value | The following table presents additional information about level 3 servicing assets and liabilities measured at fair value on a recurring basis (in thousands): Servicing Assets Servicing Liabilities Amortized Cost at January 1, 2015 $ 3,116 $ 624 Adjustment to adopt fair value measurement 399 (29 ) Fair Value at January 1, 2015 $ 3,515 $ 595 Additions 14,909 283 Less: Transfers to PMI (249 ) — Less: Changes in fair value (4,570 ) (394 ) Fair Value at January 1, 2016 $ 13,605 $ 484 Additions 9,833 9 Less: Changes in fair value (10,977 ) (295 ) Fair Value at December 31, 2016 $ 12,461 $ 198 |
Level 3 Liabilities Measured on Recurring Basis | The following table presents additional information about level 3 Loan Trailing Fee Liability measured at fair value on a recurring basis (in thousands): Balance at January 1, 2016 $ — Issuances 647 Cash payment of Loan Trailing Fee (21 ) Change in fair value 39 Balance at December 31, 2016 $ 665 |
Fair Value Assumptions for Loans Held for Sale, Borrower Loans and Notes | Key economic assumptions and the sensitivity of the current fair value to immediate changes in those assumptions at December 31, 2016 for Borrower Loans, Loans Held for Sale and Notes originated through the Note Channel are presented in the following table (in thousands, except percentages): Borrower Loans Notes Discount rate assumption: 7.30 % * 7.30 % * Resulting fair value from: 100 basis point increase $ 312,424 $ 313,022 200 basis point increase 309,302 309,888 Resulting fair value from: 100 basis point decrease $ 318,913 $ 319,535 200 basis point decrease 322,288 322,921 Default rate assumption: 11.94 % * 11.94 % * Resulting fair value from: 100 basis point increase $ 312,171 $ 312,759 200 basis point increase 308,833 309,401 Resulting fair value from: 100 basis point decrease $ 319,112 $ 319,743 200 basis point decrease 322,640 323,294 |
Schedule of Prosper's and Prosper Funding's Estimated Fair Value of Servicing Assets and Liabilities | The following table presents the estimated impact on Prosper Funding’s estimated fair value of servicing assets and liabilities, calculated using different market servicing rates, prepayment rates and different default rates as of December 31, 2016 (in thousands, except percentages). Servicing Assets Servicing Liabilities Weighted average market servicing rate assumptions 0.625 % 0.625 % Resulting fair value from: Servicing rate increase to 0.65% 11,615 217 Servicing rate decrease to 0.60% 13,307 177 Weighted average prepayment assumptions 20.02 % 20.02 % Resulting fair value from: Applying a 1.1 multiplier to prepayment rate 12,262 194 Applying a 0.9 multiplier to prepayment rate 12,662 201 Weighted average default assumptions 11.59 % 11.59 % Resulting fair value from: Applying a 1.1 multiplier to default rate 12,271 198 Applying a 0.9 multiplier to default rate 12,654 198 |
American HealthCare Lending A37
American HealthCare Lending Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Preliminary Purchase Price Allocation | The purchase price allocation is as follows (in thousands): Fair Value Assets: Cash $ 1,219 Accounts receivable, net 147 Property, equipment and software, net 6 Other assets 63 Identified intangible assets: Customer relationships 2,650 Developed technology 810 Brand name 60 Goodwill 16,825 Liabilities: Accrued expenses and other liabilities 708 Total purchase consideration $ 21,072 The preliminary purchase price allocation as of the merger date is as follows (in thousands): Fair Value Assets: Cash $ 811 Property and equipment 82 Prepaid and other assets 152 Identified intangible assets: Developed technology 7,500 Customer relationships 3,600 Goodwill 19,543 Liabilities: Accounts payable and accrued expenses (1,635 ) Long term debt (1,395 ) Convertible loan (3,652 ) Deferred revenue (1,400 ) Total purchase consideration $ 23,606 |
BillGuard Acquisition - (Tables
BillGuard Acquisition - (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Preliminary Purchase Price Allocation | The purchase price allocation is as follows (in thousands): Fair Value Assets: Cash $ 1,219 Accounts receivable, net 147 Property, equipment and software, net 6 Other assets 63 Identified intangible assets: Customer relationships 2,650 Developed technology 810 Brand name 60 Goodwill 16,825 Liabilities: Accrued expenses and other liabilities 708 Total purchase consideration $ 21,072 The preliminary purchase price allocation as of the merger date is as follows (in thousands): Fair Value Assets: Cash $ 811 Property and equipment 82 Prepaid and other assets 152 Identified intangible assets: Developed technology 7,500 Customer relationships 3,600 Goodwill 19,543 Liabilities: Accounts payable and accrued expenses (1,635 ) Long term debt (1,395 ) Convertible loan (3,652 ) Deferred revenue (1,400 ) Total purchase consideration $ 23,606 |
Unaudited Pro Forma Financial Information | The following unaudited pro forma financial information summarizes the combined results of operations for Prosper and BillGuard, as though the companies were combined as of January 1, 2014. These pro forma results have been prepared for comparative purposes only and do not purport to be indicative of the results of operations which would have resulted had the acquisition occurred as of January 1, 2015, nor is it indicative of future operating results. The pro forma results presented below include, amortization of acquired intangible assets and compensation expense related to the post-acquisition compensation arrangements entered into with the continuing employees (in thousands, except per share information): Year Ended December 31, 2015 2014 Total net revenue $ 204,350 $ 81,195 Net loss (1) (33,677 ) (16,728 ) Basic and diluted net loss per share attributable to common stockholders $ (0.61 ) $ (0.71 ) (1) Net loss for the year ended December 31, 2015 excludes $1.6 million of one-time acquisition-related costs expenses incurred in 2015 . |
Goodwill and Other Intangible39
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table presents the goodwill activity for the periods presented (in thousands): Goodwill - January 1, 2015 $ — 2015 acquisitions $ 36,368 Goodwill - December 31, 2015 $ 36,368 2016 acquisitions — Goodwill - December 31, 2016 $ 36,368 |
Summary of Other Intangible Assets for the Periods Presented | The following table presents the detail of other intangible assets for the periods presented (dollars in thousands): December 31, 2016 Gross Carrying Value Accumulated Amortization Net Carrying Value Remaining Useful Life (In Years) Developed technology $ 8,310 $ (2,393 ) $ 5,917 3.8 User base and customer relationships 6,250 (2,955 ) 3,295 8.3 Brand name 60 (60 ) — 0.0 Total intangible assets subject to amortization $ 14,620 $ (5,408 ) $ 9,212 December 31, 2015 Gross Carrying Value Accumulated Amortization Net Carrying Value Remaining Useful Life (In Years) Developed technology $ 8,310 $ (622 ) $ 7,688 4.8 User base and customer relationships 6,250 (892 ) 5,358 9.1 Brand name 60 (55 ) 5 0.1 Total intangible assets subject to amortization $ 14,620 $ (1,569 ) $ 13,051 |
Summary of Estimated Amortization of Purchased Intangible Assets | Estimated amortization of purchased intangible assets for future periods is as follows (in thousands): Year Ending December 31, 2017 $ 3,260 2018 2,329 2019 1,779 2020 1,344 Thereafter 500 Total $ 9,212 |
Other Liabilities (Tables)
Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Other Liabilities [Abstract] | |
Schedule of Other Liabilities | Other Liabilities includes the following (in thousands): Year Ending December 31, 2016 2015 Class action settlement liability $ 2,996 $ 5,949 Repurchase liability for unvested restricted stock awards 118 473 Contingent consideration — 4,801 Deferred revenue 226 1,591 Servicing liabilities 198 484 Deferred rent 4,469 5,240 Restructuring liability 6,052 — Other 3,114 2,197 Total Other Liabilities $ 17,173 $ 20,735 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Net Loss Per Share | Basic and diluted net loss per share was calculated as follows (net loss in thousands): Year ended December 31, 2016 2015 2014 Numerator: Net loss $ (118,741 ) $ (25,968 ) $ (2,669 ) Excess return to preferred shareholders on repurchase — — (14,892 ) Net loss available to common stockholders for basic and diluted EPS (118,741 ) (25,968 ) (17,561 ) Denominator: Weighted average shares used in computing basic and diluted net loss per share 64,196,537 55,547,408 44,484,005 Basic and diluted net loss per share $ (1.85 ) $ (0.47 ) $ (0.39 ) |
Dilutive Shares Excluded from the Diluted Net Loss Per Share Calculation | Due to losses attributable to PMI’s common shareholders for each of the periods below, the following potentially dilutive shares are excluded from the diluted net loss per share calculation because they were anti-dilutive under the treasury stock or if converted method: Year ended December 31, 2016 2015 2014 (shares) (shares) (shares) Excluded securities: Convertible preferred stock issued and outstanding 177,388,425 177,388,425 153,499,785 Stock options issued and outstanding 44,099,577 34,358,106 24,974,990 Unvested stock options exercised 1,126,210 9,806,170 20,571,345 Restricted Stock Units 351,721 190,517 — Warrants issued and outstanding 988,513 588,660 884,435 Series E Convertible Preferred Stock warrants 1,254,111 — — Total common stock equivalents excluded from diluted net loss per common share computation 225,208,557 222,331,878 199,930,555 |
Convertible Preferred Stock, 42
Convertible Preferred Stock, Warrant Liability and Stockholders’ Deficit (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
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, 2016 are disclosed in the table below (dollar amounts in thousands, except per share information): Convertible Preferred Stock Par Value Authorized shares Outstanding and Issued Liquidation Preference New Series A $ 0.01 68,558,220 68,558,220 $ 19,774 Series A-1 0.01 24,760,915 24,760,915 49,522 New Series B 0.01 35,775,880 35,775,880 21,581 New Series C 0.01 24,404,770 24,404,770 70,075 New Series D 0.01 23,888,640 23,888,640 165,000 New Series E 0.01 40,000,000 — — 217,388,425 177,388,425 $ 325,952 |
Schedule of Assumptions Used | As of December 31, 2016, the Company determined the fair value of the outstanding convertible preferred stock warrants utilizing the following assumptions: As of December 31, 2016 Volatility 40.0% Risk-free interest rate 2.45% Remaining contractual term (in years) 9.96 Dividend yield 0% |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Activity of Options that were Early Exercised under the Plan | The activity of options that were early exercised under the 2005 Plan follow for the years below: Early exercised options, unvested Weighted average exercise price Weighted Average Contractual Term (in years) Balance as of January 1, 2016 9,806,170 0.05 Repurchase of restricted stock (673,750 ) 0.12 Restricted stock vested (8,006,210 ) 0.03 Balance as of December 31, 2016 1,126,210 0.11 0.42 Options expected to vest 1,086,592 $ 0.11 0.42 |
Additional Information Regarding the Unvested Early Exercised Stock Options Outstanding | Additional information regarding the unvested early exercised stock options outstanding as of December 31, 2016 is as follows: Options Outstanding Range of Exercise Prices Number Outstanding Weighted –Avg. Remaining Life Weighted –Avg. Exercise Price $0.02 881,295 0.20 $ 0.02 0.11 171,855 1.05 0.11 1.13 73,060 1.61 1.13 $0.02 - $1.13 1,126,210 0.42 $ 0.11 |
Summarized Option Activity under Option Plan | Stock option activity under the 2005 Plan and 2015 Plan is summarized as follows for the years below: Options Issued and Outstanding Weighted- Average Exercise Price Weighted Average Contractual Term (in years) Balance as of January 1, 2016 40,425,605 $ 2.64 Options granted 19,655,338 $ 2.14 Options exercised – vested (466,300 ) $ 0.65 Options forfeited (18,218,924 ) $ 2.43 Balance as of December 31, 2016 41,395,719 $ 1.48 8.28 Options vested and expected to vest as of December 31, 2016 33,019,875 $ 1.48 8.28 Options vested and exercisable at December 31, 2016 24,589,730 $ 1.06 7.65 |
Additional Information Regarding Common Stock Options Outstanding | Additional information regarding common stock options outstanding as of December 31, 2016 is as follows: Options Outstanding Options Vested and Exercisable Range of Exercise Prices Number Outstanding Weighted – Avg. Remaining Life Weighted – Avg. Exercise Price Number Vested Weighted - Avg. Exercise Price 0.02 - $0.99 12,236,805 6.88 $ 0.12 12,236,805 $ 0.12 1.00 - 1.99 2,788,790 7.61 1.13 1,987,935 1.13 2.00 - 3.62 26,370,124 9.00 2.14 10,364,990 2.14 0.02 - 3.62 41,395,719 8.28 $ 1.48 24,589,730 $ 1.06 |
Fair Value of Stock Option Awards | The fair value of PMI’s stock option awards for the year ended December 31, 2016 , 2015 and 2014 was estimated at the date of grant using the Black-Scholes model with the following average assumptions: Year ended December 31, 2016 2015 2014 Volatility of common stock 50.88 % 55.69 % 68.28 % Risk-free interest rate 1.29 % 1.74 % 1.79 % Expected life 5.8 years 6.0 years 5.7 years Dividend yield — % — % — % |
Summarized Activities for RSU's | The following table summarizes the activities for PMI’s RSUs during 2016 : Number of Shares Weighted-Average Grant Date Fair Value Unvested at January 1, 2016 1,835,510 5.52 Granted 3,818,225 2.07 Vested (444,553 ) 5.52 Forfeited (3,214,023 ) 3.45 Unvested - December 31, 2016 1,995,159 2.16 |
Stock Based Compensation Included in Consolidated Statements of Operations | The following table presents the amount of stock-based compensation related to stock-based awards granted to employees recognized in Prosper’s consolidated statements of operations during the periods presented (in thousands): December 31, 2016 2015 2014 Origination and Servicing $ 2,004 $ 1,231 $ 104 Sales and Marketing 2,914 2,561 767 General and Administrative 14,824 9,219 1,150 Restructuring 45 — — Total stock based compensation $ 19,787 $ 13,011 $ 2,021 |
Restructuring (Tables)
Restructuring (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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): Severance Related Facilities Related Total Balance January 1, 2016 $ — $ — $ — Adjustments to expense 7,256 8,735 15,991 Transfer from deferred rent — 764 764 Less: Cash paid (6,659 ) (3,447 ) (10,106 ) Balance December 31, 2016 $ 597 $ 6,052 $ 6,649 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Components of Income Tax | The components of income tax are as follows (in thousands): Year Ended December 31, 2016 2015 2014 Current: Federal $ — $ — $ — State — — — Foreign 124 (5 ) — Total Current Income Tax (Benefit) 124 (5 ) — Deferred: Federal 394 320 — State 28 25 — Foreign — — Total Deferred Income Tax 422 345 — Total Income Tax $ 546 $ 340 $ — |
Effective Income Tax Reconciliation | The income tax expense (benefit) differed from the amount computed by applying the U.S. federal income tax rate of 34% to pretax loss as a result of the following: Year Ended December 31, 2016 2015 2014 Federal tax at statutory rate 34 % 34 % 34 % State tax at statutory rate (net of federal benefit) 7 % 12 % 1 % Change to Uncertain Tax Position — % 10 % — % Permanent Items (1 )% — % (11 )% Incentive Stock Options (2 )% (9 )% (9 )% Acquisition Related Costs — % (3 )% — % Change in valuation allowance (37 )% (46 )% (25 )% Credits and Reserves — % — % 9 % Other (1 )% 1 % 1 % — % (1 )% — % |
Deferred Tax Assets and Liabilities | Temporary items that give rise to significant portions of deferred tax assets and liabilities at December 31, 2016 and 2015 are as follows (in thousands): December 31, 2016 2015 Net operating loss carry forwards $ 85,759 $ 44,632 Research & other credits 626 502 Settlement liability 1,230 2,466 Stock compensation 7,300 3,193 Accrued liabilities 4,884 5,794 Restructuring liability 2,424 — Other 62 126 Deferred tax assets 102,285 56,713 Fair value of loans (1,045 ) (1,406 ) Net servicing rights (4,895 ) (5,752 ) Fixed assets (1,226 ) (721 ) Intangible assets (3,226 ) (4,246 ) Foreign Earnings (270 ) — Deferred tax liabilities (10,662 ) (12,125 ) Net deferred tax assets 91,623 44,588 Valuation allowance (92,389 ) (44,933 ) Net deferred tax liabilities $ (766 ) $ (345 ) |
Unrecognized Tax Benefits | The following table summarizes Prosper’s activity related to its unrecognized tax benefits (in thousands): December 31, December 31, Balance at January 1, $ 913 $ 4,927 Decrease related to current year tax position (4,014 ) Balance at December 31, $ 913 $ 913 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future Minimum Lease Payments | Future minimum rental payments under these leases as of December 31, 2016 are as follows (in thousands): 2017 $ 7,660 2018 8,129 2019 8,538 2020 8,781 2021 8,835 Thereafter 17,767 Total future operating lease obligations $ 59,710 |
Related Parties (Tables)
Related Parties (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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 December 31, 2016 and 2015 are summarized below (in thousands): Related Party Aggregate Amount of Notes Purchased Interest Earned on Notes 2016 2015 2016 2015 Executive officers and management $ 1,065 $ 1,361 $ 225 $ 206 Directors 508 244 34 9 Total $ 1,573 $ 1,605 $ 259 $ 215 Related Party Notes balance as of December 31, 2016 2015 Executive officers and management $ 1,620 $ 1,912 Directors 537 325 $ 2,157 $ 2,237 |
Prosper Funding LLC | |
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 Funding as of December 31, 2016 and 2015 are summarized below (in thousands): Aggregate Amount of Interest Earned on Related Party Notes Purchased Notes 2016 2015 2016 2015 Executive officers and management $ 1,065 $ 1,361 $ 225 $ 206 Directors — — — — Total $ 1,065 $ 1,361 $ 225 $ 206 Related Party Notes balance as of December 31, 2016 2015 Executive officers and management $ 1,620 $ 1,912 Directors — — Total $ 1,620 $ 1,912 |
Organization and Business (Deta
Organization and Business (Details) | 12 Months Ended |
Dec. 31, 2016state | |
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 | 45 |
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 | 45 |
Minimum | Prosper Funding LLC | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Loan term | 3 years |
Maximum | Prosper Funding LLC | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Loan term | 5 years |
Summary of Significant Accoun49
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2016 | Aug. 31, 2016 | |
Significant Accounting Policies [Line Items] | |||||
Impairment charges recognized during period | $ 0 | $ 0 | |||
Servicing fee | 1.00% | ||||
Increase in net servicing asset | 545,000 | ||||
Decrease in net servicing liabilities | 29,000 | ||||
Advertising costs | $ 48,100,000 | 60,100,000 | $ 24,100,000 | ||
Non-cancelable operating lease commitments | $ 59,710,000 | ||||
Software and website development costs | |||||
Significant Accounting Policies [Line Items] | |||||
Property and equipment, estimated useful life | 1 year | ||||
Prosper Funding LLC | |||||
Significant Accounting Policies [Line Items] | |||||
Servicing fee | 1.00% | ||||
Increase in net servicing asset | 399,000 | ||||
Decrease in net servicing liabilities | 29,000 | ||||
Comprehensive income (loss) | $ 0 | ||||
Minimum | |||||
Significant Accounting Policies [Line Items] | |||||
Transaction fee percentage | 1.00% | ||||
Minimum | Software and website development costs | |||||
Significant Accounting Policies [Line Items] | |||||
Property and equipment, estimated useful life | 1 year | ||||
Minimum | Prosper Funding LLC | Software and website development costs | |||||
Significant Accounting Policies [Line Items] | |||||
Property and equipment, estimated useful life | 1 year | ||||
Maximum | |||||
Significant Accounting Policies [Line Items] | |||||
Transaction fee percentage | 5.00% | ||||
Maximum | Software and website development costs | |||||
Significant Accounting Policies [Line Items] | |||||
Property and equipment, estimated useful life | 5 years | ||||
Maximum | Prosper Funding LLC | Software and website development costs | |||||
Significant Accounting Policies [Line Items] | |||||
Property and equipment, estimated useful life | 5 years | ||||
Customer relationships | Minimum | |||||
Significant Accounting Policies [Line Items] | |||||
Intangible assets amortized period | 3 years | ||||
Customer relationships | Maximum | |||||
Significant Accounting Policies [Line Items] | |||||
Intangible assets amortized period | 10 years | ||||
Developed technology | Minimum | |||||
Significant Accounting Policies [Line Items] | |||||
Intangible assets amortized period | 3 years | ||||
Developed technology | Maximum | |||||
Significant Accounting Policies [Line Items] | |||||
Intangible assets amortized period | 5 years | ||||
Brand name | |||||
Significant Accounting Policies [Line Items] | |||||
Intangible assets amortized period | 1 year | ||||
Change in Accounting Principle | |||||
Significant Accounting Policies [Line Items] | |||||
Decrease to accumulated deficit | 574,000 | ||||
Change in Accounting Principle | Prosper Funding LLC | |||||
Significant Accounting Policies [Line Items] | |||||
Decrease to accumulated deficit | $ 428,000 | ||||
Borrower Loans | |||||
Significant Accounting Policies [Line Items] | |||||
Servicing fee | 1.00% | 1.075% | |||
Borrower Loans | Prosper Funding LLC | |||||
Significant Accounting Policies [Line Items] | |||||
Servicing fee | 1.075% |
Summary of Significant Accoun50
Summary of Significant Accounting Policies - Estimated Useful Lives of Assets (Details) | 12 Months Ended |
Dec. 31, 2016 | |
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 |
Software and website development costs | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful life | 1 year |
Software and website development costs | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful life | 1 year |
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, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 42,127 | $ 32,915 |
Less accumulated depreciation and amortization | (17,274) | (7,950) |
Total property and equipment, net | 24,853 | 24,965 |
Prosper Funding LLC | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 16,749 | 10,990 |
Less accumulated depreciation and amortization | (6,654) | (2,571) |
Total property and equipment, net | 10,095 | 8,419 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 14,107 | 10,522 |
Software and website development costs | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 16,750 | 10,990 |
Software and website development costs | Prosper Funding LLC | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 16,749 | 10,990 |
Office equipment and furniture | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 3,010 | 2,442 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 7,038 | 5,719 |
Assets not yet placed in service | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 1,222 | $ 3,242 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation and Amortization | $ 13,220 | $ 7,649 | $ 2,097 |
Recorded internal-use software and website development impairment charges | 800 | ||
Prosper Funding LLC | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation and Amortization | 4,083 | 3,161 | |
Property and Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation and Amortization | 9,381 | 6,080 | 2,097 |
Software and website development costs | |||
Property, Plant and Equipment [Line Items] | |||
Capitalized internal-use software and website development costs | 6,251 | 7,348 | 846 |
Recorded internal-use software and website development impairment charges | 1,083 | 0 | $ 322 |
Software and website development costs | Prosper Funding LLC | |||
Property, Plant and Equipment [Line Items] | |||
Capitalized internal-use software and website development costs | $ 5,800 | $ 10,500 |
Borrower Loans, Loans Held fo53
Borrower Loans, Loans Held for Sale, and Notes Held at Fair Value - Schedule of Components (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Borrower Loans, at Fair Value | $ 315,627 | $ 297,273 |
Notes at Fair Value | (316,236) | (297,405) |
Loans Held for Sale, at Fair Value | 624 | 32 |
Prosper Funding LLC | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Borrower Loans, at Fair Value | 315,627 | 297,273 |
Notes at Fair Value | (316,236) | (297,405) |
Loans Held for Sale, at Fair Value | 624 | 32 |
Notes | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Aggregate principal balance outstanding, Notes | (323,358) | (294,331) |
Fair value adjustments, Notes | 7,122 | (3,074) |
Notes at Fair Value | (316,236) | (297,405) |
Notes | Prosper Funding LLC | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Aggregate principal balance outstanding, Notes | (323,358) | (294,331) |
Fair value adjustments, Notes | 7,122 | (3,074) |
Notes at Fair Value | (316,236) | (297,405) |
Borrower Loans | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Aggregate principal balance outstanding, Borrower Loans | 319,143 | 296,945 |
Fair value adjustments, Loans | (3,516) | 328 |
Borrower Loans, at Fair Value | 315,627 | 297,273 |
Borrower Loans | Prosper Funding LLC | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Aggregate principal balance outstanding, Borrower Loans | 319,143 | 296,945 |
Fair value adjustments, Loans | (3,516) | 328 |
Borrower Loans, at Fair Value | 315,627 | 297,273 |
Loans Held for Sale | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Fair value adjustments, Loans | (17) | (10) |
Aggregate principal balance outstanding, Loans Held for Sale | 641 | 42 |
Loans Held for Sale, at Fair Value | 624 | 32 |
Loans Held for Sale | Prosper Funding LLC | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Fair value adjustments, Loans | (17) | (10) |
Aggregate principal balance outstanding, Loans Held for Sale | 641 | 42 |
Loans Held for Sale, at Fair Value | $ 624 | $ 32 |
Borrower Loans, Loans Held fo54
Borrower Loans, Loans Held for Sale, and Notes Held at Fair Value - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Loss related to credit risks on borrower loans | $ 2.4 | |
Minimum number of days for which loans originated were delinquent | 90 days | 90 days |
Aggregate principal amount of loans originated | $ 3.2 | $ 2.3 |
Fair value of loans originated | $ 1 | 0.9 |
Non accrual status past due date | 120 days | |
Borrower Loans receivable | $ 0.5 | $ 0.1 |
Prosper Funding LLC | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Loss related to credit risks on borrower loans | $ 2.4 | |
Minimum number of days for which loans originated were delinquent | 90 days | 90 days |
Fair value of loans originated | $ 1 | $ 0.9 |
Borrower Loans receivable | 0.5 | 0.1 |
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 | $ 3.2 | $ 2.3 |
Outstanding Borrower Loans And Underlying Notes | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Fixed interest rate, Minimum | 5.32% | |
Fixed interest rate, Maximum | 33.04% | |
Outstanding Borrower Loans And Underlying Notes | Prosper Funding LLC | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Fixed interest rate, Minimum | 5.32% | |
Fixed interest rate, Maximum | 33.04% | |
Loans Held For Sale Borrower Loans And Underlying Notes | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Fixed interest rate, Minimum | 5.32% | |
Fixed interest rate, Maximum | 33.04% | |
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 | 5.32% | |
Fixed interest rate, Maximum | 33.04% | |
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 | 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 |
Loan Servicing Assets and Lia55
Loan Servicing Assets and Liabilities (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Gain on sale of borrower loans | $ 3,637,000 | $ 14,151,000 | $ 3,227,000 |
Impairment of loan | 0 | ||
Prosper Funding LLC | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Gain on sale of borrower loans | $ 3,637,000 | 14,151,000 | |
Prosper Funding LLC | Minimum | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Borrower loans original maturity term | 3 years | ||
Prosper Funding LLC | Maximum | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Borrower loans original maturity term | 5 years | ||
Borrower Loans | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Outstanding principle | $ 3,500,000,000 | $ 3,800,000,000 | |
Fixed interest rate, Minimum | 5.32% | 5.32% | |
Fixed interest rate, Maximum | 35.52% | 31.90% | |
Contractually specified servicing fees, late charges and ancillary fees | $ 38,900,000 | $ 22,100,000 | 5,300,000 |
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] | |||
Outstanding principle | $ 3,400,000,000 | $ 3,600,000,000 | |
Fixed interest rate, Minimum | 5.32% | 5.32% | |
Fixed interest rate, Maximum | 35.52% | 31.90% | |
Contractually specified servicing fees, late charges and ancillary fees | $ 38,200,000 | $ 20,400,000 | |
Borrower Loans | Prosper Funding LLC | Minimum | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Borrower loans original maturity term | 36 months | 36 months | |
Borrower Loans | Prosper Funding LLC | Maximum | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Borrower loans original maturity term | 60 months | 60 months | |
Borrower Loans | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Gain on sale of borrower loans | $ 3,600,000 | $ 14,200,000 | $ 4,000,000 |
Borrower Loans | Prosper Funding LLC | |||
Servicing Assets And Liabilities Fair Value [Line Items] | |||
Gain on sale of borrower loans | $ 3,600,000 | $ 14,200,000 |
Available for Sale Investment56
Available for Sale Investments, at Fair Value - Schedule of Amortized Cost (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | $ 32,777 | $ 73,331 |
Gross Unrealized Gains | 5 | 1 |
Gross Unrealized Losses | (13) | (145) |
Available for Sale Investments, at Fair Value | 32,769 | 73,187 |
Fixed Maturities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 70,831 | |
Gross Unrealized Gains | 1 | |
Gross Unrealized Losses | (143) | |
Available for Sale Investments, at Fair Value | 70,689 | |
Corporate debt securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 21,762 | 50,327 |
Gross Unrealized Gains | 1 | 1 |
Gross Unrealized Losses | (10) | (94) |
Available for Sale Investments, at Fair Value | 21,753 | 50,234 |
Commercial paper | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 9,493 | |
Available for Sale Investments, at Fair Value | 9,493 | |
US Treasury securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 8,516 | 8,512 |
Gross Unrealized Gains | 3 | |
Gross Unrealized Losses | (3) | (41) |
Available for Sale Investments, at Fair Value | 8,516 | 8,471 |
Agency bonds | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 2,499 | 2,499 |
Gross Unrealized Gains | 1 | |
Gross Unrealized Losses | (8) | |
Available for Sale Investments, at Fair Value | $ 2,500 | 2,491 |
Short term bond funds | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 2,500 | |
Gross Unrealized Losses | (2) | |
Available for Sale Investments, at Fair Value | $ 2,498 |
Available for Sale Investment57
Available for Sale Investments, at Fair Value - Continuous Unrealized Losses (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Schedule Of Available For Sale Securities [Line Items] | |
Fair value, less than 12 months | $ 0 |
Unrealized losses, less than 12 months | 0 |
Fair value, 12 months or longer | 19,150 |
Unrealized losses, 12 months or longer | (13) |
Fair Value | 19,150 |
Unrealized Losses | (13) |
Corporate debt securities | |
Schedule Of Available For Sale Securities [Line Items] | |
Fair value, less than 12 months | 0 |
Unrealized losses, less than 12 months | 0 |
Fair value, 12 months or longer | 14,651 |
Unrealized losses, 12 months or longer | (10) |
Fair Value | 14,651 |
Unrealized Losses | (10) |
US Treasury securities | |
Schedule Of Available For Sale Securities [Line Items] | |
Fair value, less than 12 months | 0 |
Unrealized losses, less than 12 months | 0 |
Fair value, 12 months or longer | 4,499 |
Unrealized losses, 12 months or longer | (3) |
Fair Value | 4,499 |
Unrealized Losses | $ (3) |
Available for Sale Investment58
Available for Sale Investments, at Fair Value - Maturities of Investments (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Schedule Of Available For Sale Securities [Line Items] | |
Fair value within 1 year | $ 32,769 |
Fair value after 1 year through 5 years | 0 |
Fair value after 5 years to 10 years | 0 |
Fair value after 10 years | 0 |
Fair value | 32,769 |
Amortized cost within 1 year | 32,777 |
Amortized cost after 1 year through 5 years | 0 |
Amortized after 5 years to 10 years | 0 |
Amortized after 10 years | 0 |
Amortized cost | 32,777 |
Corporate debt securities | |
Schedule Of Available For Sale Securities [Line Items] | |
Fair value within 1 year | 21,753 |
Fair value after 1 year through 5 years | 0 |
Fair value after 5 years to 10 years | 0 |
Fair value after 10 years | 0 |
Fair value | 21,753 |
US Treasury securities | |
Schedule Of Available For Sale Securities [Line Items] | |
Fair value within 1 year | 8,516 |
Fair value after 1 year through 5 years | 0 |
Fair value after 5 years to 10 years | 0 |
Fair value after 10 years | 0 |
Fair value | 8,516 |
Agency bonds | |
Schedule Of Available For Sale Securities [Line Items] | |
Fair value within 1 year | 2,500 |
Fair value after 1 year through 5 years | 0 |
Fair value after 5 years to 10 years | 0 |
Fair value after 10 years | 0 |
Fair value | $ 2,500 |
Available for Sale Investment59
Available for Sale Investments, at Fair Value - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Segment Reporting [Abstract] | |||
Proceeds from sale of available for sale securities | $ 12,445 | $ 4,022 | $ 0 |
Gain on available-for-sale securities | $ 12 |
Fair Value of Assets and Liab60
Fair Value of Assets and Liabilities - Fair Value Hierarchy (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | Oct. 09, 2015 |
Assets: | |||
Borrower Loans | $ 315,627,000 | $ 297,273,000 | |
Loans Held for Sale | 624,000 | 32,000 | |
Available for Sale Investments, at Fair Value | 32,769,000 | 73,187,000 | |
Servicing Assets | 12,786,000 | 14,363,000 | |
Total Assets | 361,806,000 | 384,855,000 | |
Liabilities: | |||
Notes | 316,236,000 | 297,405,000 | |
Servicing Liabilities | 198,000 | 484,000 | |
Convertible Preferred Stock Warrant Liability | 21,711,000 | ||
Loan Trailing Fee Liability | 665,000 | ||
Contingent Consideration | 0 | 4,801,000 | $ 3,800,000 |
Total Liabilities | 338,810,000 | 302,690,000 | |
Prosper Funding LLC | |||
Assets: | |||
Borrower Loans | 315,627,000 | 297,273,000 | |
Loans Held for Sale | 624,000 | 32,000 | |
Available for Sale Investments, at Fair Value | 624,000 | 32,000 | |
Servicing Assets | 12,461,000 | 13,605,000 | |
Total Assets | 328,712,000 | 310,910,000 | |
Liabilities: | |||
Notes | 316,236,000 | 297,405,000 | |
Servicing Liabilities | 198,000 | 484,000 | |
Contingent Consideration | 665,000 | ||
Total Liabilities | 317,099,000 | 297,889,000 | |
Level 1 Inputs | |||
Assets: | |||
Borrower Loans | 0 | 0 | |
Loans Held for Sale | 0 | 0 | |
Available for Sale Investments, at Fair Value | 0 | 0 | |
Servicing Assets | 0 | 0 | |
Total Assets | 0 | 0 | |
Liabilities: | |||
Notes | 0 | 0 | |
Servicing Liabilities | 0 | 0 | |
Convertible Preferred Stock Warrant Liability | 0 | ||
Loan Trailing Fee Liability | 0 | ||
Contingent Consideration | 0 | ||
Total Liabilities | 0 | 0 | |
Level 1 Inputs | Prosper Funding LLC | |||
Assets: | |||
Borrower Loans | 0 | 0 | |
Loans Held for Sale | 0 | 0 | |
Servicing Assets | 0 | 0 | |
Total Assets | 0 | 0 | |
Liabilities: | |||
Notes | 0 | 0 | |
Servicing Liabilities | 0 | 0 | |
Contingent Consideration | 0 | ||
Total Liabilities | 0 | 0 | |
Level 2 Inputs | |||
Assets: | |||
Borrower Loans | 0 | 0 | |
Loans Held for Sale | 0 | 0 | |
Available for Sale Investments, at Fair Value | 32,769,000 | 73,187,000 | |
Servicing Assets | 0 | 0 | |
Total Assets | 32,769,000 | 73,187,000 | |
Liabilities: | |||
Notes | 0 | 0 | |
Servicing Liabilities | 0 | 0 | |
Convertible Preferred Stock Warrant Liability | 0 | ||
Loan Trailing Fee Liability | 0 | ||
Contingent Consideration | 0 | ||
Total Liabilities | 0 | 0 | |
Level 2 Inputs | Prosper Funding LLC | |||
Assets: | |||
Borrower Loans | 0 | 0 | |
Loans Held for Sale | 0 | 0 | |
Servicing Assets | 0 | 0 | |
Total Assets | 0 | 0 | |
Liabilities: | |||
Notes | 0 | 0 | |
Servicing Liabilities | 0 | 0 | |
Contingent Consideration | 0 | ||
Total Liabilities | 0 | 0 | |
Level 3 Inputs | |||
Assets: | |||
Borrower Loans | 315,627,000 | 297,273,000 | |
Loans Held for Sale | 624,000 | 32,000 | |
Available for Sale Investments, at Fair Value | 0 | 0 | |
Servicing Assets | 12,786,000 | 14,363,000 | |
Total Assets | 329,037,000 | 311,668,000 | |
Liabilities: | |||
Notes | 316,236,000 | 297,405,000 | |
Servicing Liabilities | 198,000 | 484,000 | |
Convertible Preferred Stock Warrant Liability | 21,711,000 | ||
Loan Trailing Fee Liability | 665,000 | ||
Contingent Consideration | 4,801,000 | ||
Total Liabilities | 338,810,000 | 302,690,000 | |
Level 3 Inputs | Prosper Funding LLC | |||
Assets: | |||
Borrower Loans | 315,627,000 | 297,273,000 | |
Loans Held for Sale | 624,000 | 32,000 | |
Servicing Assets | 12,461,000 | 13,605,000 | |
Total Assets | 328,712,000 | 310,910,000 | |
Liabilities: | |||
Notes | 316,236,000 | 297,405,000 | |
Servicing Liabilities | 198,000 | 484,000 | |
Contingent Consideration | 665,000 | ||
Total Liabilities | $ 317,099,000 | $ 297,889,000 |
Fair Value of Assets and Liab61
Fair Value of Assets and Liabilities - Borrower Loans, Loans Held For Sale and Notes (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Minimum | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Discount rate | 4.00% | 4.30% |
Default rate | 1.70% | 1.40% |
Minimum | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Discount rate | 4.00% | 4.30% |
Default rate | 1.70% | 1.40% |
Maximum | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Discount rate | 15.90% | 14.50% |
Default rate | 14.90% | 14.40% |
Maximum | Prosper Funding LLC | ||
Fair Value Inputs Assets Quantitative Information [Line Items] | ||
Discount rate | 15.90% | 14.50% |
Default rate | 14.90% | 14.40% |
Fair Value of Assets and Liab62
Fair Value of Assets and Liabilities - Servicing Rights (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Servicing Assets And Liabilities Fair Value [Line Items] | ||
Market servicing rate | 0.625% | 0.625% |
Market rate for collection fee | 0.12% | 0.08% |
Weighted average market servicing rate | 0.745% | 0.705% |
Prosper Funding LLC | ||
Servicing Assets And Liabilities Fair Value [Line Items] | ||
Market servicing rate | 0.625% | 0.625% |
Market rate for collection fee | 0.12% | 0.08% |
Weighted average market servicing rate | 0.745% | 0.705% |
Minimum | ||
Servicing Assets And Liabilities Fair Value [Line Items] | ||
Discount rate | 15.00% | 15.00% |
Default rate | 1.50% | 1.20% |
Prepayment rate | 13.60% | 14.30% |
Minimum | Prosper Funding LLC | ||
Servicing Assets And Liabilities Fair Value [Line Items] | ||
Discount rate | 15.00% | 15.00% |
Default rate | 1.50% | 1.20% |
Prepayment rate | 13.60% | 14.30% |
Maximum | ||
Servicing Assets And Liabilities Fair Value [Line Items] | ||
Discount rate | 25.00% | 25.00% |
Default rate | 15.20% | 14.70% |
Prepayment rate | 26.60% | 25.60% |
Maximum | Prosper Funding LLC | ||
Servicing Assets And Liabilities Fair Value [Line Items] | ||
Discount rate | 25.00% | 25.00% |
Default rate | 15.20% | 14.70% |
Prepayment rate | 26.60% | 25.60% |
Fair Value of Assets and Liab63
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, 2016 | Dec. 31, 2015 | |
Changes in Level 3 assets measured at fair value on a recurring basis [Abstract] | ||
Beginning balance, Total | $ (100) | $ 7,923 |
Purchase of Borrower Loans/Issuance of Notes, Total | 1,979,767 | 3,517,675 |
Principal repayments, Total | 2,316 | (565) |
Borrower Loans sold to third parties, Total | (1,981,420) | (3,525,249) |
Other changes, Total | (176) | 57 |
Change in fair value, Total | (372) | 59 |
Ending balance, Total | 15 | (100) |
Prosper Funding LLC | ||
Changes in Level 3 assets measured at fair value on a recurring basis [Abstract] | ||
Beginning balance, Total | (100) | 7,923 |
Originations, Total | 1,979,767 | 3,517,675 |
Principal repayments, Total | 2,316 | (565) |
Borrower Loans sold to third parties, Total | (1,981,420) | (3,525,249) |
Other changes, Total | (176) | 57 |
Change in fair value, Total | (372) | 59 |
Ending balance, Total | 15 | (100) |
Notes | ||
Changes in Level 3 assets measured at fair value on a recurring basis [Abstract] | ||
Beginning balance, Liabilities | (297,405) | (273,783) |
Purchase of Loans/Issuance of Notes, Liabilities | (217,767) | (197,228) |
Principal repayments, Liabilities | 173,958 | 151,025 |
Borrower Loans sold to third parties, Liabilities | 0 | 813 |
Other changes, Liabilities | (591) | (6) |
Change in fair value of the preferred stock warrant liability | 25,569 | 21,774 |
Ending balance, Liabilities | (316,236) | (297,405) |
Notes | Prosper Funding LLC | ||
Changes in Level 3 assets measured at fair value on a recurring basis [Abstract] | ||
Beginning balance, Liabilities | (297,405) | (273,783) |
Originations, Liabilities | (217,767) | (197,228) |
Principal repayments, Liabilities | 173,958 | 151,025 |
Borrower Loans sold to third parties, Liabilities | 0 | 813 |
Other changes, Liabilities | (591) | (6) |
Change in fair value of the preferred stock warrant liability | 25,569 | 21,774 |
Ending balance, Liabilities | (316,236) | (297,405) |
Borrower Loans | ||
Changes in Level 3 assets measured at fair value on a recurring basis [Abstract] | ||
Beginning balance, Assets | 297,273 | 273,243 |
Purchase of Borrower Loans/Issuance of Notes, Assets | 217,582 | 197,436 |
Principal repayments, Assets | (171,195) | (151,038) |
Borrower Loans sold to third parties, Assets | (2,515) | (855) |
Other changes, Assets | 416 | 81 |
Change in fair value, Assets | (25,934) | (21,594) |
Ending balance, Assets | 315,627 | 297,273 |
Borrower Loans | Prosper Funding LLC | ||
Changes in Level 3 assets measured at fair value on a recurring basis [Abstract] | ||
Beginning balance, Assets | 297,273 | 273,243 |
Originations, Assets | 217,582 | 197,436 |
Principal repayments, Assets | (171,195) | (151,038) |
Borrower Loans sold to third parties, Assets | (2,515) | (855) |
Other changes, Assets | 416 | 81 |
Change in fair value, Assets | (25,934) | (21,594) |
Ending balance, Assets | 315,627 | 297,273 |
Loans Held for Sale | ||
Changes in Level 3 assets measured at fair value on a recurring basis [Abstract] | ||
Beginning balance, Assets | 32 | 8,463 |
Purchase of Borrower Loans/Issuance of Notes, Assets | 1,979,952 | 3,517,467 |
Principal repayments, Assets | (447) | (552) |
Borrower Loans sold to third parties, Assets | (1,978,905) | (3,525,207) |
Other changes, Assets | (1) | (18) |
Change in fair value, Assets | (7) | (121) |
Ending balance, Assets | 624 | 32 |
Loans Held for Sale | Prosper Funding LLC | ||
Changes in Level 3 assets measured at fair value on a recurring basis [Abstract] | ||
Beginning balance, Assets | 32 | 8,463 |
Originations, Assets | 1,979,952 | 3,517,467 |
Principal repayments, Assets | (447) | (552) |
Borrower Loans sold to third parties, Assets | (1,978,905) | (3,525,207) |
Other changes, Assets | (1) | (18) |
Change in fair value, Assets | (7) | (121) |
Ending balance, Assets | $ 624 | $ 32 |
Fair Value of Assets and Liab64
Fair Value of Assets and Liabilities - Schedule of Servicing Assets and Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Servicing Assets | |||
Amortized cost at beginning of period | $ 12,786 | $ 14,363 | |
Adjustment to adopt fair value measurement | 545 | ||
Servicing Liabilities | |||
Adjustments to adopt fair value measurement | 29 | ||
Prosper Funding LLC | |||
Servicing Assets | |||
Amortized cost at beginning of period | 12,461 | 13,605 | |
Adjustment to adopt fair value measurement | 399 | ||
Servicing Liabilities | |||
Adjustments to adopt fair value measurement | 29 | ||
Servicing Assets | |||
Servicing Assets | |||
Amortized cost at beginning of period | $ 4,163 | ||
Adjustment to adopt fair value measurement | 545 | ||
Fair value at beginning of period | 14,363 | 4,708 | |
Additions | 9,833 | 14,909 | |
Less: Changes in fair value | (11,410) | (5,254) | |
Fair Value at end of period | 12,786 | 14,363 | |
Servicing Assets | Prosper Funding LLC | |||
Servicing Assets | |||
Amortized cost at beginning of period | 3,116 | ||
Adjustment to adopt fair value measurement | 399 | ||
Fair value at beginning of period | 13,605 | 3,515 | |
Additions | 9,833 | 14,909 | |
Less: Transfers to PMI | (249) | ||
Less: Changes in fair value | (10,977) | (4,570) | |
Fair Value at end of period | 12,461 | 13,605 | |
Servicing Liabilities | |||
Servicing Liabilities | |||
Amortized cost at beginning of period | 624 | ||
Adjustments to adopt fair value measurement | (29) | ||
Fair value at beginning of the period | 484 | 595 | |
Additions | 9 | 283 | |
Less: Changes in fair value | (295) | (394) | |
Fair value at end of the period | 198 | 484 | |
Servicing Liabilities | Prosper Funding LLC | |||
Servicing Liabilities | |||
Amortized cost at beginning of period | 624 | ||
Adjustments to adopt fair value measurement | $ (29) | ||
Fair value at beginning of the period | 484 | 595 | |
Additions | 9 | 283 | |
Less: Changes in fair value | (295) | (394) | |
Fair value at end of the period | $ 198 | $ 484 |
Fair Value of Assets and Liab65
Fair Value of Assets and Liabilities - Preferred Stock Warrant and Trailing Fee (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Mandatorily Redeemable Preferred Stock | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at January 1, 2016 | $ 0 |
Issuances | 21,704 |
Change in fair value of the preferred stock warrant liability | 7 |
Balance at December 31, 2016 | 21,711 |
Trailing Fee | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at January 1, 2016 | 0 |
Issuances | 647 |
Cash payment of Loan Trailing Fee | (21) |
Change in fair value of the preferred stock warrant liability | 39 |
Balance at December 31, 2016 | 665 |
Prosper Funding LLC | Trailing Fee | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at January 1, 2016 | 0 |
Issuances | 647 |
Cash payment of Loan Trailing Fee | (21) |
Change in fair value of the preferred stock warrant liability | 39 |
Balance at December 31, 2016 | $ 665 |
Fair Value of Assets and Liab66
Fair Value of Assets and Liabilities - Additional Information (Details) - USD ($) | Oct. 09, 2015 | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Contingent consideration | $ 3,800,000 | $ 0 | $ 4,801,000 |
Changes in fair value | $ 200,000 | $ 1,000,000 | |
BillGuard Inc | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Outstanding shares purchased by parent company | 100.00% | ||
Duration of payment for purchase of outstanding shares | 1 year |
- Assumptions for Borrower Loan
- Assumptions for Borrower Loans, Loans Held for Sale and Notes (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Discount rate assumption | Borrower Loans / Loans Held for Sale | |
Fair Value Inputs Assets Quantitative Information [Line Items] | |
Discount rate | 7.30% |
Discount rate assumption | Borrower Loans / Loans Held for Sale | Prosper Funding LLC | |
Fair Value Inputs Assets Quantitative Information [Line Items] | |
Discount rate | 7.30% |
Discount rate assumption | Notes | |
Fair Value Inputs Assets Quantitative Information [Line Items] | |
Discount rate | 7.30% |
Discount rate assumption | Notes | Prosper Funding LLC | |
Fair Value Inputs Assets Quantitative Information [Line Items] | |
Discount rate | 7.30% |
Discount rate assumption | 100 basis point increase | Borrower Loans / Loans Held for Sale | |
Fair Value Inputs Assets Quantitative Information [Line Items] | |
Borrower loans | $ 312,424 |
Discount rate assumption | 100 basis point increase | Borrower Loans / Loans Held for Sale | Prosper Funding LLC | |
Fair Value Inputs Assets Quantitative Information [Line Items] | |
Borrower loans | 312,424 |
Discount rate assumption | 100 basis point increase | Notes | |
Fair Value Inputs Assets Quantitative Information [Line Items] | |
Notes | 313,022 |
Discount rate assumption | 100 basis point increase | Notes | Prosper Funding LLC | |
Fair Value Inputs Assets Quantitative Information [Line Items] | |
Notes | 313,022 |
Discount rate assumption | 200 basis point increase | Borrower Loans / Loans Held for Sale | |
Fair Value Inputs Assets Quantitative Information [Line Items] | |
Borrower loans | 309,302 |
Discount rate assumption | 200 basis point increase | Borrower Loans / Loans Held for Sale | Prosper Funding LLC | |
Fair Value Inputs Assets Quantitative Information [Line Items] | |
Borrower loans | 309,302 |
Discount rate assumption | 200 basis point increase | Notes | |
Fair Value Inputs Assets Quantitative Information [Line Items] | |
Notes | 309,888 |
Discount rate assumption | 200 basis point increase | Notes | Prosper Funding LLC | |
Fair Value Inputs Assets Quantitative Information [Line Items] | |
Notes | 309,888 |
Discount rate assumption | 100 basis point decrease | Borrower Loans / Loans Held for Sale | |
Fair Value Inputs Assets Quantitative Information [Line Items] | |
Borrower loans | 318,913 |
Discount rate assumption | 100 basis point decrease | Borrower Loans / Loans Held for Sale | Prosper Funding LLC | |
Fair Value Inputs Assets Quantitative Information [Line Items] | |
Borrower loans | 318,913 |
Discount rate assumption | 100 basis point decrease | Notes | |
Fair Value Inputs Assets Quantitative Information [Line Items] | |
Notes | 319,535 |
Discount rate assumption | 100 basis point decrease | Notes | Prosper Funding LLC | |
Fair Value Inputs Assets Quantitative Information [Line Items] | |
Notes | 319,535 |
Discount rate assumption | 200 basis point decrease | Borrower Loans / Loans Held for Sale | |
Fair Value Inputs Assets Quantitative Information [Line Items] | |
Borrower loans | 322,288 |
Discount rate assumption | 200 basis point decrease | Borrower Loans / Loans Held for Sale | Prosper Funding LLC | |
Fair Value Inputs Assets Quantitative Information [Line Items] | |
Borrower loans | 322,288 |
Discount rate assumption | 200 basis point decrease | Notes | |
Fair Value Inputs Assets Quantitative Information [Line Items] | |
Notes | 322,921 |
Discount rate assumption | 200 basis point decrease | Notes | Prosper Funding LLC | |
Fair Value Inputs Assets Quantitative Information [Line Items] | |
Notes | $ 322,921 |
Default rate assumption | Borrower Loans / Loans Held for Sale | |
Fair Value Inputs Assets Quantitative Information [Line Items] | |
Default rate | 11.94% |
Default rate assumption | Borrower Loans / Loans Held for Sale | Prosper Funding LLC | |
Fair Value Inputs Assets Quantitative Information [Line Items] | |
Default rate | 11.94% |
Default rate assumption | Notes | |
Fair Value Inputs Assets Quantitative Information [Line Items] | |
Default rate | 11.94% |
Default rate assumption | Notes | Prosper Funding LLC | |
Fair Value Inputs Assets Quantitative Information [Line Items] | |
Default rate | 11.94% |
Default rate assumption | 100 basis point increase | Borrower Loans / Loans Held for Sale | |
Fair Value Inputs Assets Quantitative Information [Line Items] | |
Borrower loans | $ 312,171 |
Default rate assumption | 100 basis point increase | Borrower Loans / Loans Held for Sale | Prosper Funding LLC | |
Fair Value Inputs Assets Quantitative Information [Line Items] | |
Borrower loans | 312,171 |
Default rate assumption | 100 basis point increase | Notes | |
Fair Value Inputs Assets Quantitative Information [Line Items] | |
Notes | 312,759 |
Default rate assumption | 100 basis point increase | Notes | Prosper Funding LLC | |
Fair Value Inputs Assets Quantitative Information [Line Items] | |
Notes | 312,759 |
Default rate assumption | 200 basis point increase | Borrower Loans / Loans Held for Sale | |
Fair Value Inputs Assets Quantitative Information [Line Items] | |
Borrower loans | 308,833 |
Default rate assumption | 200 basis point increase | Borrower Loans / Loans Held for Sale | Prosper Funding LLC | |
Fair Value Inputs Assets Quantitative Information [Line Items] | |
Borrower loans | 308,833 |
Default rate assumption | 200 basis point increase | Notes | |
Fair Value Inputs Assets Quantitative Information [Line Items] | |
Notes | 309,401 |
Default rate assumption | 200 basis point increase | Notes | Prosper Funding LLC | |
Fair Value Inputs Assets Quantitative Information [Line Items] | |
Notes | 309,401 |
Default rate assumption | 100 basis point decrease | Borrower Loans / Loans Held for Sale | |
Fair Value Inputs Assets Quantitative Information [Line Items] | |
Borrower loans | 319,112 |
Default rate assumption | 100 basis point decrease | Borrower Loans / Loans Held for Sale | Prosper Funding LLC | |
Fair Value Inputs Assets Quantitative Information [Line Items] | |
Borrower loans | 319,112 |
Default rate assumption | 100 basis point decrease | Notes | |
Fair Value Inputs Assets Quantitative Information [Line Items] | |
Notes | 319,743 |
Default rate assumption | 100 basis point decrease | Notes | Prosper Funding LLC | |
Fair Value Inputs Assets Quantitative Information [Line Items] | |
Notes | 319,743 |
Default rate assumption | 200 basis point decrease | Borrower Loans / Loans Held for Sale | |
Fair Value Inputs Assets Quantitative Information [Line Items] | |
Borrower loans | 322,640 |
Default rate assumption | 200 basis point decrease | Borrower Loans / Loans Held for Sale | Prosper Funding LLC | |
Fair Value Inputs Assets Quantitative Information [Line Items] | |
Borrower loans | 322,640 |
Default rate assumption | 200 basis point decrease | Notes | |
Fair Value Inputs Assets Quantitative Information [Line Items] | |
Notes | 323,294 |
Default rate assumption | 200 basis point decrease | Notes | Prosper Funding LLC | |
Fair Value Inputs Assets Quantitative Information [Line Items] | |
Notes | $ 323,294 |
Fair Value of Assets and Liab68
Fair Value of Assets and Liabilities - Assumptions Used for Servicing Assets and Liabilities (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Resulting fair value from: | |
Servicing rate increase | 0.65% |
Servicing rate decrease | 0.60% |
Prosper Funding LLC | |
Resulting fair value from: | |
Servicing rate increase | 0.65% |
Servicing rate decrease | 0.60% |
Servicing Assets | |
Servicing Assets And Liabilities Fair Value [Line Items] | |
Weighted average market servicing rate assumptions | 0.625% |
Resulting fair value from: | |
Market servicing rate increase to 0.65%, Servicing assets | $ 11,918 |
Market servicing rate decrease to 0.60%, Servicing assets | $ 13,654 |
Weighted average prepayment assumptions | 20.02% |
Weighted average default assumptions | 11.59% |
Servicing Assets | Prosper Funding LLC | |
Servicing Assets And Liabilities Fair Value [Line Items] | |
Weighted average market servicing rate assumptions | 0.625% |
Resulting fair value from: | |
Market servicing rate increase to 0.65%, Servicing assets | $ 11,615 |
Market servicing rate decrease to 0.60%, Servicing assets | $ 13,307 |
Weighted average prepayment assumptions | 20.02% |
Weighted average default assumptions | 11.59% |
Servicing Liabilities | |
Servicing Assets And Liabilities Fair Value [Line Items] | |
Weighted average market servicing rate assumptions | 0.625% |
Resulting fair value from: | |
Market servicing rate increase to 0.65%, Servicing liabilities | $ 217 |
Market servicing rate decrease to 0.60%, Servicing liabilities | $ 177 |
Weighted average prepayment assumptions | 20.02% |
Weighted average default assumptions | 11.59% |
Servicing Liabilities | Prosper Funding LLC | |
Servicing Assets And Liabilities Fair Value [Line Items] | |
Weighted average market servicing rate assumptions | 0.625% |
Resulting fair value from: | |
Market servicing rate increase to 0.65%, Servicing liabilities | $ 217 |
Market servicing rate decrease to 0.60%, Servicing liabilities | $ 177 |
Weighted average prepayment assumptions | 20.02% |
Weighted average default assumptions | 11.59% |
Prepayment rate assumption | |
Resulting fair value from: | |
Prepayment rate increase | 1.10% |
Prepayment rate decrease | 0.90% |
Prepayment rate assumption | Prosper Funding LLC | |
Resulting fair value from: | |
Default rate increase | 1.10% |
Default rate decrease | 0.90% |
Prepayment rate assumption | Servicing Assets | 1.1 Multiplier to Default Rate | |
Resulting fair value from: | |
Applying a 1.1 multiplier to default rate | $ 12,581 |
Prepayment rate assumption | Servicing Assets | 1.1 Multiplier to Default Rate | Prosper Funding LLC | |
Resulting fair value from: | |
Applying a 1.1 multiplier to default rate | 12,262 |
Prepayment rate assumption | Servicing Assets | 0.9 Multiplier Default Rate | |
Resulting fair value from: | |
Applying a 0.9 multiplier to default rate | 12,992 |
Prepayment rate assumption | Servicing Assets | 0.9 Multiplier Default Rate | Prosper Funding LLC | |
Resulting fair value from: | |
Applying a 0.9 multiplier to default rate | 12,662 |
Prepayment rate assumption | Servicing Liabilities | 1.1 Multiplier to Default Rate | |
Resulting fair value from: | |
Applying a 1.1 multiplier to default rate | 194 |
Prepayment rate assumption | Servicing Liabilities | 1.1 Multiplier to Default Rate | Prosper Funding LLC | |
Resulting fair value from: | |
Applying a 1.1 multiplier to default rate | 194 |
Prepayment rate assumption | Servicing Liabilities | 0.9 Multiplier Default Rate | |
Resulting fair value from: | |
Applying a 0.9 multiplier to default rate | 201 |
Prepayment rate assumption | Servicing Liabilities | 0.9 Multiplier Default Rate | Prosper Funding LLC | |
Resulting fair value from: | |
Applying a 0.9 multiplier to default rate | $ 201 |
Default rate assumption | |
Resulting fair value from: | |
Default rate increase | 1.10% |
Default rate decrease | 0.90% |
Default rate assumption | Prosper Funding LLC | |
Resulting fair value from: | |
Default rate increase | 1.10% |
Default rate decrease | 0.90% |
Default rate assumption | Servicing Assets | 1.1 Multiplier to Default Rate | |
Resulting fair value from: | |
Applying a 1.1 multiplier to default rate | $ 12,592 |
Default rate assumption | Servicing Assets | 1.1 Multiplier to Default Rate | Prosper Funding LLC | |
Resulting fair value from: | |
Applying a 1.1 multiplier to default rate | 12,271 |
Default rate assumption | Servicing Assets | 0.9 Multiplier Default Rate | |
Resulting fair value from: | |
Applying a 0.9 multiplier to default rate | 12,984 |
Default rate assumption | Servicing Assets | 0.9 Multiplier Default Rate | Prosper Funding LLC | |
Resulting fair value from: | |
Applying a 0.9 multiplier to default rate | 12,654 |
Default rate assumption | Servicing Liabilities | 1.1 Multiplier to Default Rate | |
Resulting fair value from: | |
Applying a 1.1 multiplier to default rate | 198 |
Default rate assumption | Servicing Liabilities | 1.1 Multiplier to Default Rate | Prosper Funding LLC | |
Resulting fair value from: | |
Applying a 1.1 multiplier to default rate | 198 |
Default rate assumption | Servicing Liabilities | 0.9 Multiplier Default Rate | |
Resulting fair value from: | |
Applying a 0.9 multiplier to default rate | 198 |
Default rate assumption | Servicing Liabilities | 0.9 Multiplier Default Rate | Prosper Funding LLC | |
Resulting fair value from: | |
Applying a 0.9 multiplier to default rate | $ 198 |
American HealthCare Lending A69
American HealthCare Lending Acquisition - Additional Information (Details) - American HealthCare Lending, LLC - USD ($) $ in Millions | Jan. 23, 2015 | Jan. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2015 |
Business Acquisition [Line Items] | ||||
Cash paid | $ 20.2 | |||
Future payments to acquire businesses | $ 0.8 | |||
Revenue of acquired included in consolidated statement since merger date | $ 2.8 | |||
Loss of acquired included in consolidated statement since merger date | $ (5.8) | |||
Acquisition expenses | $ 0.2 |
American HealthCare Lending A70
American HealthCare Lending Acquisition - Preliminary Purchase Price Allocation (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Jan. 23, 2015 | Dec. 31, 2014 |
Identified intangible assets: | ||||
Goodwill | $ 36,368 | $ 36,368 | $ 0 | |
American HealthCare Lending, LLC | ||||
Assets: | ||||
Cash | $ 1,219 | |||
Accounts receivable, net | 147 | |||
Property, equipment and software, net | 6 | |||
Other assets | 63 | |||
Identified intangible assets: | ||||
Goodwill | 16,825 | |||
Liabilities: | ||||
Accrued expenses and other liabilities | 708 | |||
Total purchase consideration | 21,072 | |||
American HealthCare Lending, LLC | Brand name | ||||
Identified intangible assets: | ||||
Identified intangible assets | 60 | |||
American HealthCare Lending, LLC | Customer relationships | ||||
Identified intangible assets: | ||||
Identified intangible assets | 2,650 | |||
American HealthCare Lending, LLC | Developed technology | ||||
Identified intangible assets: | ||||
Identified intangible assets | $ 810 |
BillGuard Acquisition - Additio
BillGuard Acquisition - Additional Information (Details) - BillGuard Inc - USD ($) $ in Millions | Oct. 09, 2015 | Dec. 31, 2015 | Dec. 31, 2015 |
Business Acquisition [Line Items] | |||
Cash paid | $ 20 | ||
Future payments to acquire businesses | $ 5 | ||
Revenue of acquired included in consolidated statement since merger date | $ 0.2 | ||
Loss of acquired included in consolidated statement since merger date | $ 2.6 | ||
General and Administrative | |||
Business Acquisition [Line Items] | |||
Acquisition expenses | $ 0.9 |
BillGuard Acquisition - Prelimi
BillGuard Acquisition - Preliminary Purchase Price Allocation (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Oct. 09, 2015 | Dec. 31, 2014 |
Assets: | ||||
Goodwill | $ 36,368 | $ 36,368 | $ 0 | |
BillGuard Inc | ||||
Assets: | ||||
Cash | $ 811 | |||
Property and equipment | 82 | |||
Prepaid and other assets | 152 | |||
Goodwill | 19,543 | |||
Liabilities: | ||||
Accounts payable and accrued expenses | (1,635) | |||
Long term debt | (1,395) | |||
Convertible loan | (3,652) | |||
Deferred revenue | (1,400) | |||
Total purchase consideration | 23,606 | |||
BillGuard Inc | Developed technology | ||||
Assets: | ||||
Identified intangible assets | 7,500 | |||
BillGuard Inc | Customer relationships | ||||
Assets: | ||||
Identified intangible assets | $ 3,600 |
BillGuard Acquisition - Pro For
BillGuard Acquisition - Pro Forma Information (Details) - BillGuard Inc - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Business Acquisition [Line Items] | ||
Total net revenue | $ 204,350 | $ 81,195 |
Net loss | $ (33,677) | $ (16,728) |
Basic and diluted net loss per share attributable to common stockholders (in dollars per share) | $ (0.61) | $ (0.71) |
One Time Acquisition Related Costs Expenses Excluded From Net Loss | ||
Business Acquisition [Line Items] | ||
Acquisition expenses | $ 1,600 |
Goodwill and Other Intangible74
Goodwill and Other Intangible Assets - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill And Other Intangible Assets [Line Items] | |||
Goodwill impairment expense | $ 0 | $ 0 | $ 0 |
Intangible additions | 0 | ||
Amortization of intangible assets | $ 3,800,000 | $ 1,600,000 | $ 0 |
Customer relationships | Minimum | |||
Goodwill And Other Intangible Assets [Line Items] | |||
Intangible assets amortized period | 3 years | ||
Customer relationships | Maximum | |||
Goodwill And Other Intangible Assets [Line Items] | |||
Intangible assets amortized period | 10 years | ||
Developed technology | Minimum | |||
Goodwill And Other Intangible Assets [Line Items] | |||
Intangible assets amortized period | 3 years | ||
Developed technology | Maximum | |||
Goodwill And Other Intangible Assets [Line Items] | |||
Intangible assets amortized period | 5 years | ||
Brand name | |||
Goodwill And Other Intangible Assets [Line Items] | |||
Intangible assets amortized period | 1 year |
Goodwill and Other Intangible75
Goodwill and Other Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill [Roll Forward] | ||
Goodwill | $ 36,368 | $ 0 |
Acquisitions | 0 | 36,368 |
Goodwill | $ 36,368 | $ 36,368 |
Goodwill and Other Intangible76
Goodwill and Other Intangible Assets - Other Intangible (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 14,620 | $ 14,620 |
Accumulated Amortization | (5,408) | (1,569) |
Net Carrying Value | 9,212 | 13,051 |
Developed technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 8,310 | 8,310 |
Accumulated Amortization | (2,393) | (622) |
Net Carrying Value | $ 5,917 | $ 7,688 |
Remaining Useful Life (In Years) | 3 years 9 months 18 days | 4 years 9 months 18 days |
User base and customer relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 6,250 | $ 6,250 |
Accumulated Amortization | (2,955) | (892) |
Net Carrying Value | $ 3,295 | $ 5,358 |
Remaining Useful Life (In Years) | 8 years 3 months 18 days | 9 years 1 month 6 days |
Brand name | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 60 | $ 60 |
Accumulated Amortization | (60) | (55) |
Net Carrying Value | $ 0 | $ 5 |
Remaining Useful Life (In Years) | 0 years | 1 month 6 days |
Goodwill and Other Intangible77
Goodwill and Other Intangible Assets - Estimated Amortization (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | ||
2,017 | $ 3,260 | |
2,018 | 2,329 | |
2,019 | 1,779 | |
2,020 | 1,344 | |
Thereafter | 500 | |
Net Carrying Value | $ 9,212 | $ 13,051 |
Other Liabilities (Details)
Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Restructuring Cost and Reserve [Line Items] | ||
Class action settlement liability | $ 2,996 | $ 5,949 |
Repurchase liability for unvested restricted stock awards | 118 | 473 |
Contingent consideration | 0 | 4,801 |
Deferred revenue | 226 | 1,591 |
Servicing liabilities | 198 | 484 |
Deferred rent | 4,469 | 5,240 |
Restructuring liability | 6,649 | 0 |
Other | 3,114 | 2,197 |
Total Other Liabilities | 17,173 | 20,735 |
Facilities Related | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring liability | $ 6,052 | $ 0 |
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, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Numerator: | |||
Net loss | $ (118,741) | $ (25,968) | $ (2,669) |
Excess return to preferred shareholders on repurchase | 0 | 0 | (14,892) |
Net Loss Applicable to Common Shareholders | $ (118,741) | $ (25,968) | $ (17,561) |
Denominator: | |||
Weighted average shares used in computing basic and diluted net loss per share (in shares) | 64,196,537 | 55,547,408 | 44,484,005 |
Basic and diluted net loss per share (in dollars per share) | $ (1.85) | $ (0.47) | $ (0.39) |
Net Loss Per Share - Dilutive S
Net Loss Per Share - Dilutive Shares Excluded from Calculation (Details) - shares | Feb. 16, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
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) | 225,208,557 | 222,331,878 | 199,930,555 | |
Forward stock split, shares issued (in shares) | 5 | |||
Convertible Preferred Stock | ||||
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) | 177,388,425 | 177,388,425 | 153,499,785 | |
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) | 44,099,577 | 34,358,106 | 24,974,990 | |
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) | 1,126,210 | 9,806,170 | 20,571,345 | |
Restrictive Stock Units | ||||
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) | 351,721 | 190,517 | 0 | |
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) | 988,513 | 588,660 | 884,435 | |
Series E 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) | 1,254,111 | 0 | 0 |
Convertible Preferred Stock, 81
Convertible Preferred Stock, Warrant Liability and Stockholders’ Deficit - Additional Information (Details) | Nov. 17, 2016$ / sharesshares | Feb. 16, 2016shares | Jul. 16, 2014USD ($)shares | Jun. 18, 2014$ / sharesshares | Apr. 30, 2015USD ($)$ / sharesshares | May 31, 2014USD ($)$ / sharesshares | Sep. 30, 2013USD ($)$ / sharesshares | Jan. 31, 2013USD ($)$ / sharesshares | Dec. 31, 2016USD ($)time$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($) | May 15, 2014$ / sharesshares |
Class of Stock [Line Items] | ||||||||||||
Purchase price for shares | $ | $ 0 | $ 164,793,000 | $ 69,958,000 | |||||||||
Stock split conversion ratio | 5 | 1 | ||||||||||
Common stock convertible ratio if preferred stock did not participate (in shares) | 10 | |||||||||||
Repurchase of preferred stock | $ | $ 18,500,000 | $ 0 | $ 0 | $ 18,527,000 | ||||||||
Preferred stock, shares authorized (in shares) | 217,388,425 | 177,388,425 | 217,388,425 | |||||||||
Reverse stock split, shares issued (in shares) | 5 | |||||||||||
Dividends | $ | $ 0 | |||||||||||
Convertible preferred stock warrant liability | $ | $ 21,711,000 | |||||||||||
Common and preferred stock, shares authorized (in shares) | 555,610,528 | |||||||||||
Common stock, shares authorized (in shares) | 338,222,103 | 270,326,075 | 338,222,425 | |||||||||
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) | 70,843,044 | 70,367,425 | ||||||||||
Common stock, shares outstanding (in shares) | 69,907,109 | 69,431,490 | ||||||||||
Compensation costs | $ | $ 6,200,000 | |||||||||||
Common Stock | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Stock issued during the period (in shares) | 673,750 | 1,493,775 | ||||||||||
Exercise of common stock warrants (in dollars per share) | $ / shares | $ 0.38 | $ 0.61 | ||||||||||
Exercise of stock options (in shares) | 466,300 | 3,211,935 | ||||||||||
Cash proceeds | $ | $ 310,000 | $ 880,000 | ||||||||||
Exercise of nonvested stock options (in shares) | 76,045 | |||||||||||
Unvested restricted stock outstanding (in shares) | 1,126,210 | 9,806,170 | ||||||||||
Warrants issued and outstanding | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Shares issued (in shares) | 56,480 | 207,065 | ||||||||||
Executives | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Stock issued during the period (in shares) | 3,607,095 | |||||||||||
Aggregate price for repurchase of common stock | $ | $ 24,900,000 | |||||||||||
Employees | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Stock issued during the period (in shares) | 4,225,490 | |||||||||||
Stock repurchased during period, price per share | $ / shares | $ 6.91 | |||||||||||
Aggregate price for repurchase of common stock | $ | $ 29,200,000 | |||||||||||
New Series A | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Shares issued (in shares) | 6,963,785 | 69,340,760 | ||||||||||
Convertible preferred stock, price per share (in dollars per share) | $ / shares | $ 2.87 | $ 0.29 | ||||||||||
Purchase price for shares | $ | $ 19,800,000 | |||||||||||
Stock issued during the period (in shares) | 782,540 | |||||||||||
Preferred stock, shares authorized (in shares) | 68,558,220 | |||||||||||
Conversion ratio of preferred stock into prosper common stock (in shares) | 1 | |||||||||||
Number of times the shareholders are entitled to receive the original issue price | time | 3 | |||||||||||
Liquidation preference per share (in dollars per share) | $ / shares | $ 0.29 | |||||||||||
Common stock, shares authorized (in shares) | 68,558,220 | |||||||||||
Series A 1 Convertible Preferred Stock | ||||||||||||
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 | |||||||||||
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 A-1 | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Stock split conversion ratio | 1,000,000 | |||||||||||
Liquidation preference per share (in dollars per share) | $ / shares | $ 2 | |||||||||||
Preferred stock, shares authorized (in shares) | 24,760,915 | |||||||||||
Common stock, shares authorized (in shares) | 24,760,915 | |||||||||||
New 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 | |||||||||||
Stock issued during the period (in shares) | 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 | |||||||||||
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 | $ 0.60 | |||||||||||
Common stock, shares authorized (in shares) | 35,775,880 | |||||||||||
New 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 | |||||||||||
Common stock, shares authorized (in shares) | 24,404,770 | |||||||||||
Series D Convertible Preferred Stock | ||||||||||||
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 | |||||||||||
New Series E | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Preferred stock, shares authorized (in shares) | 40,000,000 | |||||||||||
Liquidation preference per share (in dollars per share) | $ / shares | $ 1.48 | |||||||||||
Warrant to purchase shares (in shares) | 20,267,135 | |||||||||||
Exercise of common stock warrants (in dollars per share) | $ / shares | $ 0.01 | |||||||||||
Warrant expiration period | 10 years | |||||||||||
Convertible preferred stock warrant liability | $ | $ 21,700,000 | |||||||||||
Remeasurement of fair value | $ | $ 7,000 | |||||||||||
Common stock, shares authorized (in shares) | 40,000,000 | |||||||||||
New Series D | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Preferred stock, shares authorized (in shares) | 23,888,640 | |||||||||||
Common stock, shares authorized (in shares) | 23,888,640 | |||||||||||
Origination and Servicing | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Compensation costs | $ | 330,000 | |||||||||||
Sales and Marketing | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Compensation costs | $ | 70,000 | |||||||||||
General and Administrative | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Compensation costs | $ | $ 5,700,000 |
Convertible Preferred Stock, 82
Convertible Preferred Stock, Warrant Liability and Stockholders’ Deficit - Summary of Shares Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | May 15, 2014 |
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) | 217,388,425 | 177,388,425 | 217,388,425 |
Convertible preferred stock, shares outstanding (in shares) | 177,388,425 | 177,388,425 | |
Convertible preferred stock, shares issued (in shares) | 177,388,425 | 177,388,425 | |
Convertible preferred stock, aggregate liquidation preference | $ 325,952 | $ 325,952 | |
New 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) | 68,558,220 | ||
Convertible preferred stock, aggregate liquidation preference | $ 19,774 | ||
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) | 24,760,915 | ||
Convertible preferred stock, aggregate liquidation preference | $ 49,522 | ||
New 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) | 35,775,880 | ||
Convertible preferred stock, aggregate liquidation preference | $ 21,581 | ||
New 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, aggregate liquidation preference | $ 70,075 | ||
New 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, aggregate liquidation preference | $ 165,000 | ||
New Series E | |||
Class of Stock [Line Items] | |||
Convertible preferred stock, par value (in dollars per share) | $ 0.01 | ||
Convertible preferred stock, shares authorized (in shares) | 40,000,000 | ||
Convertible preferred stock, shares outstanding (in shares) | 0 | ||
Convertible preferred stock, aggregate liquidation preference | $ 0 |
Convertible Preferred Stock, 83
Convertible Preferred Stock, Warrant Liability and Stockholders’ Deficit - Valuation Techniques (Details) - USD ($) $ in Thousands | Feb. 16, 2016 | Apr. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Forward stock split, shares issued (in shares) | 5 | ||||
Common stock, shares outstanding (in shares) | 69,907,109 | 69,431,490 | |||
Proceeds from Issuance of Convertible Preferred Stock, Net | $ 0 | $ 164,793 | $ 69,958 | ||
Series D Convertible Preferred Stock | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Proceeds from Issuance of Convertible Preferred Stock, Net | $ 164,800 | ||||
New Series E | Mandatorily Redeemable Preferred Stock | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Volatility | 40.00% | ||||
Risk-free interest rate | 2.45% | ||||
Remaining contractual term (in years) | 9 years 11 months 16 days | ||||
Dividend yield | 0.00% |
Stock-based Compensation - Addi
Stock-based Compensation - Additional Information (Details) | Feb. 16, 2016 | Jan. 31, 2013 | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)shares | Dec. 31, 2014USD ($)$ / sharesshares |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Options exercisable, maximum period | 10 years | ||||
Stock split conversion ratio | 5 | 1 | |||
Financial statement impact | $ 19,787,000 | $ 13,011,000 | $ 2,021,000 | ||
Unamortized expense related to unvested stock-based awards | $ 28,800,000 | ||||
Granted stock options to purchase (in shares) | shares | 19,655,338 | ||||
Weighted average grant fair value (in dollars per share) | $ / shares | $ 2.04 | ||||
Unrecognized cost of unvested share-based compensation awards. | $ 0 | ||||
Stock based compensation | $ 19,787,000 | $ 13,011,000 | $ 2,021,000 | ||
Volatility rate | 50.88% | 55.69% | 68.28% | ||
Dividend yield | 0.00% | 0.00% | 0.00% | ||
Expected life | 5 years 9 months 18 days | 6 years | 5 years 8 months 12 days | ||
Risk-free interest rate | 1.29% | 1.74% | 1.79% | ||
Remaining weighted average vesting period | 2 years 3 months 18 days | ||||
Software and website development costs | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Capitalized amount | $ 718,000 | $ 623,000 | $ 21,000 | ||
Stock Option Repricing | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Financial statement impact | 2,200,000 | ||||
Unamortized expense related to unvested stock-based awards | $ 2,000,000 | ||||
Vesting period remaining | 2 years 6 months | ||||
Performance-based stock options | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Performance-based stock options granted (in shares) | shares | 0 | 0 | 10,164,480 | ||
Performance-based stock options granted, exercise price (in dollars per share) | $ / shares | $ 0.11 | ||||
Performance-based stock options granted, contractual term | 10 years | ||||
Performance-based stock options granted, vested (in shares) | shares | 9,624,480 | ||||
Performance-based stock options granted, forfeited (in shares) | shares | 540,000 | ||||
Stock based compensation | $ 587,000 | ||||
Volatility rate | 66.00% | ||||
Dividend yield | 0.00% | ||||
Expected life | 5 years 2 months 23 days | ||||
Risk-free interest rate | 1.66% | ||||
Restricted Stock Unit (RSUs) | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Aggregate fair value | $ 7,800,000 | ||||
Restricted Stock Unit (RSUs) | Minimum | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Vesting period of the options | 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 | ||||
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 | 50,458,108 | ||||
Tranche three | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Vesting percent | 25.00% | ||||
Vesting period of the options | 1 year | ||||
Vesting percent thereafter | 2.08% | ||||
Tranche two | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Vesting percent | 50.00% | ||||
Vesting period of the options | 2 years | ||||
Vesting percent thereafter | 2.08% | ||||
Tranche one | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Vesting percent thereafter | 2.78% |
Stock-based Compensation - Opti
Stock-based Compensation - Options Early Exercised (Details) - Early Exercised Stock Options Under 2005 Stock Option Plan | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Early exercised options, unvested | |
Beginning balance (in shares) | shares | 9,806,170 |
Repurchase of stock (in shares) | shares | (673,750) |
Restricted stock vested (in shares) | shares | (8,006,210) |
Ending balance (in shares) | shares | 1,126,210 |
Options expected to vest (in shares) | shares | 1,086,592 |
Weighted average exercise price | |
Weighted-Average Exercise Price, Beginning balance (in dollars per share) | $ / shares | $ 0.05 |
Repurchase of restricted stock (in dollars per share) | $ / shares | 0.12 |
Restricted stock vested (in dollars per share) | $ / shares | 0.03 |
Weighted-Average Exercise Price, Ending balance (in dollars per share) | $ / shares | 0.11 |
Options expected to vest (in dollars per share) | $ / shares | $ 0.11 |
Weighted average contractual term | 5 months 1 day |
Weighted average contractual term, Options expected to vest | 5 months 1 day |
Stock-based Compensation - Ad86
Stock-based Compensation - Additional Information Regarding Unvested Early Exercised Stock Options (Details) - Unvested stock options exercised | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items] | |
Number Outstanding (in shares) | shares | 1,126,210 |
Weighted –Avg. Remaining Life | 5 months 1 day |
Weighted Avg. Exercise Price (in dollars per share) | $ 0.11 |
$ 0.02 | |
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items] | |
Range of Exercise Prices (in dollars per share) | $ 0.02 |
Number Outstanding (in shares) | shares | 881,295 |
Weighted –Avg. Remaining Life | 2 months 12 days |
Weighted Avg. Exercise Price (in dollars per share) | $ 0.02 |
$ 0.11 | |
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items] | |
Range of Exercise Prices (in dollars per share) | $ 0.11 |
Number Outstanding (in shares) | shares | 171,855 |
Weighted –Avg. Remaining Life | 1 year 18 days |
Weighted Avg. Exercise Price (in dollars per share) | $ 0.11 |
$ 1.13 | |
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items] | |
Range of Exercise Prices (in dollars per share) | $ 1.13 |
Number Outstanding (in shares) | shares | 73,060 |
Weighted –Avg. Remaining Life | 1 year 7 months 10 days |
Weighted Avg. Exercise Price (in dollars per share) | $ 1.13 |
Stock-based Compensation - Summ
Stock-based Compensation - Summarized Option Activity (Details) | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Options Issued and Outstanding | |
Options Issued and Outstanding, Options granted (in shares) | 19,655,338 |
2005 Stock Plan and 2015 Stock Option Plan | |
Options Issued and Outstanding | |
Options Issued and Outstanding, Beginning Balance (in shares) | 40,425,605 |
Options Issued and Outstanding, Options granted (in shares) | 19,655,338 |
Options Issued and Outstanding, Options exercised - vested (in shares) | (466,300) |
Options Issued and Outstanding, Options forfeited (in shares) | (18,218,924) |
Options Issued and Outstanding, Ending balance (in shares) | 41,395,719 |
Options Issued and Outstanding, Options vested and expected to vest (in shares) | 33,019,875 |
Options Issued and Outstanding, Options vested and exercisable (in shares) | 24,589,730 |
Weighted- Average Exercise Price | |
Weighted-Average Exercise Price, Beginning balance (in dollars per share) | $ / shares | $ 2.64 |
Weighted-Average Exercise Price, Options granted (in dollars per share) | $ / shares | 2.14 |
Weighted-Average Exercise Price, Options exercised - vested (in dollars per share) | $ / shares | 0.65 |
Weighted-Average Exercise Price, Options forfeited (in dollars per share) | $ / shares | 2.43 |
Weighted-Average Exercise Price, Ending balance (in dollars per share) | $ / shares | 1.48 |
Options expected to vest (in dollars per share) | $ / shares | 1.48 |
Weighted-Average Exercise Price, Options vested and exercisable (in dollars per share) | $ / shares | $ 1.06 |
Weighted-Average Contractual Term [Roll Forward] | |
Weighted average contractual term | 8 years 3 months 11 days |
Weighted average contractual term, Options expected to vest | 8 years 3 months 11 days |
Weighted Average Contractual Term, Options vested and exercisable | 7 years 7 months 24 days |
Stock-based Compensation - Ad88
Stock-based Compensation - Additional Information Regarding Common Stock Options (Details) - Stock options issued and outstanding | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items] | |
Number Outstanding (in shares) | shares | 41,395,719 |
Weighted –Avg. Remaining Life | 8 years 3 months 11 days |
Weighted Avg. Exercise Price (in dollars per share) | $ 1.48 |
Number Exercisable (in shares) | shares | 24,589,730 |
Weighted Avg. Exercise Price (in dollars per share) | $ 1.06 |
0.02 - $0.99 | |
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items] | |
Range of Exercise Prices, Minimum (in dollars per share) | 0.02 |
Range of Exercise Prices, Maximum (in dollars per share) | $ 0.99 |
Number Outstanding (in shares) | shares | 12,236,805 |
Weighted –Avg. Remaining Life | 6 years 10 months 17 days |
Weighted Avg. Exercise Price (in dollars per share) | $ 0.12 |
Number Exercisable (in shares) | shares | 12,236,805 |
Weighted Avg. Exercise Price (in dollars per share) | $ 0.12 |
1.00 - 1.99 | |
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items] | |
Range of Exercise Prices, Minimum (in dollars per share) | 1 |
Range of Exercise Prices, Maximum (in dollars per share) | $ 1.99 |
Number Outstanding (in shares) | shares | 2,788,790 |
Weighted –Avg. Remaining Life | 7 years 7 months 10 days |
Weighted Avg. Exercise Price (in dollars per share) | $ 1.13 |
Number Exercisable (in shares) | shares | 1,987,935 |
Weighted Avg. Exercise Price (in dollars per share) | $ 1.13 |
2.00 - 3.62 | |
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items] | |
Range of Exercise Prices, Minimum (in dollars per share) | 2 |
Range of Exercise Prices, Maximum (in dollars per share) | $ 3.62 |
Number Outstanding (in shares) | shares | 26,370,124 |
Weighted –Avg. Remaining Life | 9 years |
Weighted Avg. Exercise Price (in dollars per share) | $ 2.14 |
Number Exercisable (in shares) | shares | 10,364,990 |
Weighted Avg. Exercise Price (in dollars per share) | $ 2.14 |
Stock-based Compensation - Fair
Stock-based Compensation - Fair Value of Stock Option Awards (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Fair value of stock option awards [Abstract] | |||
Volatility of common stock | 50.88% | 55.69% | 68.28% |
Risk-free interest rate | 1.29% | 1.74% | 1.79% |
Expected life | 5 years 9 months 18 days | 6 years | 5 years 8 months 12 days |
Dividend yield | 0.00% | 0.00% | 0.00% |
Stock-based Compensation - Su90
Stock-based Compensation - Summarized Activities for RSU's (Details) - Restricted Stock Unit (RSUs) | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Restricted stock unit ,Unvested ,Beginning Balance (in shares) | shares | 1,835,510 |
Granted (in shares) | shares | 3,818,225 |
Vested (in shares) | shares | (444,553) |
Forfeited (in shares) | shares | (3,214,023) |
Restricted stock unit ,Unvested ,Ending Balance (in shares) | shares | 1,995,159 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Unvested beginning balance (in dollars per share) | $ / shares | $ 5.52 |
Granted (in dollars per share) | $ / shares | 2.07 |
Vested (in dollars per share) | $ / shares | 5.52 |
Forfeited (in dollars per share) | $ / shares | 3.45 |
Unvested ending balance (in dollars per share) | $ / shares | $ 2.16 |
Stock-based Compensation - Allo
Stock-based Compensation - Allocated Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock based compensation | $ 19,787 | $ 13,011 | $ 2,021 |
Origination and Servicing | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock based compensation | 2,004 | 1,231 | 104 |
Sales and Marketing | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock based compensation | 2,914 | 2,561 | 767 |
General and Administrative | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock based compensation | 14,824 | 9,219 | 1,150 |
Restructuring | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock based compensation | $ 45 | $ 0 | $ 0 |
Restructuring - Additional Info
Restructuring - Additional Information (Details) $ in Thousands | May 03, 2016employee | Dec. 31, 2016employee | Dec. 31, 2016USD ($) |
Restructuring Cost and Reserve [Line Items] | |||
Number of employees terminated | employee | 167 | ||
Losses incurred on leases | $ 15,991 | ||
Property plant and equipment write-off | 800 | ||
Other restructuring charges | 200 | ||
Israel | |||
Restructuring Cost and Reserve [Line Items] | |||
Number of employees terminated | employee | 31 | ||
Severance Related | |||
Restructuring Cost and Reserve [Line Items] | |||
Losses incurred on leases | 7,256 | ||
Facilities Related | |||
Restructuring Cost and Reserve [Line Items] | |||
Losses incurred on leases | $ 8,735 |
Restructuring - Restructuring R
Restructuring - Restructuring Reserve (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Restructuring Reserve [Roll Forward] | |
Balance January 1, 2016 | $ 0 |
Adjustments to expense | 15,991 |
Transfer from deferred rent | 764 |
Less: Cash paid | (10,106) |
Balance December 31, 2016 | 6,649 |
Severance Related | |
Restructuring Reserve [Roll Forward] | |
Balance January 1, 2016 | 0 |
Adjustments to expense | 7,256 |
Transfer from deferred rent | 0 |
Less: Cash paid | (6,659) |
Balance December 31, 2016 | 597 |
Facilities Related | |
Restructuring Reserve [Roll Forward] | |
Balance January 1, 2016 | 0 |
Adjustments to expense | 8,735 |
Transfer from deferred rent | 764 |
Less: Cash paid | (3,447) |
Balance December 31, 2016 | $ 6,052 |
Income Taxes - Components of In
Income Taxes - Components of Income Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current: | |||
Federal | $ 0 | $ 0 | $ 0 |
State | 0 | 0 | 0 |
Foreign | 124 | (5) | 0 |
Total Current Income Tax (Benefit) | 124 | (5) | 0 |
Deferred: | |||
Federal | 394 | 320 | 0 |
State | 28 | 25 | 0 |
Foreign | 0 | 0 | |
Total Deferred Income Tax | 422 | 345 | 0 |
Total Income Tax | $ 546 | $ 340 | $ 0 |
Income Taxes - Effective Income
Income Taxes - Effective Income Tax Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Effective income tax rate reconciliation [Abstract] | |||
Federal tax at statutory rate | 34.00% | 34.00% | 34.00% |
State tax at statutory rate (net of federal benefit) | 7.00% | 12.00% | 1.00% |
Change to Uncertain Tax Position | 0.00% | 10.00% | 0.00% |
Permanent Items | (1.00%) | 0.00% | (11.00%) |
Incentive Stock Options | (2.00%) | (9.00%) | (9.00%) |
Acquisition Related Costs | 0.00% | (3.00%) | 0.00% |
Change in valuation allowance | (37.00%) | (46.00%) | (25.00%) |
Credits and Reserves | 0.00% | 0.00% | 9.00% |
Other | (1.00%) | 1.00% | 1.00% |
Total | 0.00% | (1.00%) | 0.00% |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets and liabilities [Abstract] | ||
Net operating loss carry forwards | $ 85,759 | $ 44,632 |
Research & other credits | 626 | 502 |
Settlement liability | 1,230 | 2,466 |
Stock compensation | 7,300 | 3,193 |
Accrued liabilities | 4,884 | 5,794 |
Restructuring liability | 2,424 | 0 |
Other | 62 | 126 |
Deferred tax assets | 102,285 | 56,713 |
Fair value of loans | (1,045) | (1,406) |
Net servicing rights | (4,895) | (5,752) |
Fixed assets | (1,226) | (721) |
Intangible assets | (3,226) | (4,246) |
Foreign Earnings | (270) | 0 |
Deferred tax liabilities | (10,662) | (12,125) |
Net deferred tax assets | 91,623 | 44,588 |
Valuation allowance | (92,389) | (44,933) |
Net deferred tax liabilities | $ (766) | $ (345) |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Unrecognized tax benefits [Roll Forward] | ||
Balance at January 1, | $ 913 | $ 4,927 |
Decrease related to current year tax position | (4,014) | |
Balance at December 31, | $ 913 | $ 913 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Taxes [Line Items] | |||
Federal tax at statutory rate | 34.00% | 34.00% | 34.00% |
Deferred tax assets valuation, increased amount | $ 47,500,000 | ||
Valuation allowance | 92,389,000 | $ 44,933,000 | |
Unrecognized tax benefits that would affect effective tax rate | 0 | ||
Interest and penalties related to uncertain tax positions | 0 | ||
Income tax provision | $ 546,000 | $ 340,000 | $ 0 |
Effective tax rate | 0.00% | (1.00%) | 0.00% |
Prosper Funding LLC | |||
Income Taxes [Line Items] | |||
Income tax provision | $ 0 | $ 0 | |
Effective tax rate | 0.00% | ||
Federal | |||
Income Taxes [Line Items] | |||
Net operating loss carryforwards | $ 233,600,000 | ||
Federal | Research and development | |||
Income Taxes [Line Items] | |||
Tax credit carryforwards | 428,000 | ||
State | |||
Income Taxes [Line Items] | |||
Net operating loss carryforwards | $ 257,100,000 | ||
Tax period subject to examination | 4 years | ||
California | Enterprise Zone Credit | |||
Income Taxes [Line Items] | |||
Tax credit carryforwards | $ 1,100,000 | ||
California | Research and development | |||
Income Taxes [Line Items] | |||
Tax credit carryforwards | $ 450,000 | ||
Internal Revenue Service (IRS) | |||
Income Taxes [Line Items] | |||
Tax period subject to examination | 3 years |
Colchis Agreement (Details)
Colchis Agreement (Details) - USD ($) $ / shares in Units, $ in Thousands | Nov. 17, 2016 | Dec. 31, 2016 | Dec. 31, 2015 |
Other Commitments [Line Items] | |||
Cash payment | $ 9,000 | ||
Loss on Contract Termination | $ 30,700 | ||
Prosper Funding LLC | |||
Other Commitments [Line Items] | |||
Loss on Contract Termination | $ 30,704 | $ 0 | |
Convertible Preferred Stock | |||
Other Commitments [Line Items] | |||
Capitalization percent | 7.00% | ||
Exercise of common stock warrants (in dollars per share) | $ 0.01 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) | 12 Months Ended | |||
Dec. 31, 2016USD ($)installment | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Oct. 16, 2008USD ($) | |
Entity Information [Line Items] | ||||
Rental expense under operating lease arrangements | $ 6,900,000 | $ 4,100,000 | $ 2,000,000 | |
Restructuring accrual related to operating facility leases | 6,649,000 | 0 | ||
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 | 900,000 | |||
Minimum net liquidity | 15,000,000 | |||
Purchase of borrower loans | 18,600,000 | |||
Maximum potential future payments | 3,500,000,000 | |||
Accrued repurchase and indemnification obligation | 600,000 | 500,000 | ||
Amount of loans sold to lender members | $ 178,000,000 | |||
Agreed amount of settlement liability payable to plaintiffs | $ 10,000,000 | |||
Number of annual installments paid to plaintiffs | installment | 4 | |||
Other commitment paid | $ 3,000,000 | 2,000,000 | $ 2,000,000 | |
Settlement installment due in 2017 | 3,000,000 | |||
Class action settlement liability | 2,996,000 | 5,949,000 | ||
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 | 1,000,000 | |||
Minimum net liquidity | 15,000,000 | |||
Purchase of borrower loans | 18,600,000 | |||
Maximum potential future payments | 3,400,000,000 | |||
Accrued repurchase and indemnification obligation | 600,000 | 500,000 | ||
Facilities Related | ||||
Entity Information [Line Items] | ||||
Restructuring accrual related to operating facility leases | $ 6,052,000 | $ 0 |
Commitments and Contingencie101
Commitments and Contingencies - Future Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2,017 | $ 7,660 |
2,018 | 8,129 |
2,019 | 8,538 |
2,020 | 8,781 |
2,021 | 8,835 |
Thereafter | 17,767 |
Total future operating lease obligations | $ 59,710 |
Related Parties - Additional In
Related Parties - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2016 | |
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, 2016 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | ||
Aggregate Amount of Notes Purchased | $ 1,573 | $ 1,605 |
Interest Earned on Notes | 259 | 215 |
Notes balance | 2,157 | 2,237 |
Prosper Funding LLC | ||
Related Party Transaction [Line Items] | ||
Aggregate Amount of Notes Purchased | 1,065 | 1,361 |
Interest Earned on Notes | 225 | 206 |
Notes balance | 1,620 | 1,912 |
Executive officers and management | ||
Related Party Transaction [Line Items] | ||
Aggregate Amount of Notes Purchased | 1,065 | 1,361 |
Interest Earned on Notes | 225 | 206 |
Notes balance | 1,620 | 1,912 |
Executive officers and management | Prosper Funding LLC | ||
Related Party Transaction [Line Items] | ||
Aggregate Amount of Notes Purchased | 1,065 | 1,361 |
Interest Earned on Notes | 225 | 206 |
Notes balance | 1,620 | 1,912 |
Directors | ||
Related Party Transaction [Line Items] | ||
Aggregate Amount of Notes Purchased | 508 | 244 |
Interest Earned on Notes | 34 | 9 |
Notes balance | 537 | 325 |
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, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Compensation and Retirement Disclosure [Abstract] | |||
Deferred compensation arrangement with eligible employees, percentage (up to) | 90.00% | ||
Employer contribution during the period | $ 2.6 | $ 1.9 | $ 0.7 |
Significant Concentrations (Det
Significant Concentrations (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Significant Concentrations [Line Items] | ||
Percentage of fund from whole loan channel | 90.00% | 95.00% |
Prosper Funding LLC | ||
Significant Concentrations [Line Items] | ||
Percentage of fund from whole loan channel | 90.00% | 95.00% |
Party 1 | ||
Significant Concentrations [Line Items] | ||
Percentage of loans purchased | 20.00% | 37.00% |
Party 1 | Prosper Funding LLC | ||
Significant Concentrations [Line Items] | ||
Percentage of loans purchased | 20.00% | 37.00% |
Party 2 | ||
Significant Concentrations [Line Items] | ||
Percentage of loans purchased | 16.00% | 19.00% |
Party 2 | Prosper Funding LLC | ||
Significant Concentrations [Line Items] | ||
Percentage of loans purchased | 16.00% | 19.00% |
Party 3 | ||
Significant Concentrations [Line Items] | ||
Percentage of loans purchased | 9.00% | 11.00% |
Party 3 | Prosper Funding LLC | ||
Significant Concentrations [Line Items] | ||
Percentage of loans purchased | 9.00% | 11.00% |
Segments (Details)
Segments (Details) | 12 Months Ended |
Dec. 31, 2016segment | |
Segment Reporting [Abstract] | |
Number of Reportable Segments | 1 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event $ / shares in Units, $ in Billions | Feb. 27, 2017USD ($)$ / sharesshares |
Series E Warrant | Series E-1 Preferred Stock | |
Subsequent Event [Line Items] | |
Warrant to purchase shares (in shares) | 15,277,006 |
Exercise of common stock warrants (in dollars per share) | $ / shares | $ 0.01 |
Consumer Loan | |
Subsequent Event [Line Items] | |
Aggregate amount of loan | $ | $ 5 |
Consumer Loan | Series F Warrant | |
Subsequent Event [Line Items] | |
Number of warrants issued to holder | 3 |
Consumer Loan | Series F Warrant | Series F Preferred Stock | |
Subsequent Event [Line Items] | |
Warrant to purchase shares (in shares) | 177,720,706 |
Exercise of common stock warrants (in dollars per share) | $ / shares | $ 0.01 |