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Prosper Marketplace hires banks to explore options - sources

Reuters

By Olivia Oran, Mike Stone and Lauren Hirsch

(Reuters) - Prosper Marketplace has hired investment banks Financial Technology Partners LP and JPMorgan Chase & Co to explore strategic alternatives, including selling equity in the company, according to people familiar with the matter.

Prosper, a privately held U.S. online lender, is seeking capital to shore up its funding base, and considering options that include selling a minority or majority stake in the company, the people said this week.

Online lenders like Prosper have faced headwinds for the last several months in attracting investors to buy their loans. That was compounded earlier this month when LendingClub Corp chief executive Renauld Laplanche stepped down after an internal probe found the company had falsified documentation when selling a package of loans.

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The sources asked not to be identified because the matter is confidential. Prosper and JPMorgan decline to comment, while Financial Technology Partners did not immediately respond to a request for comment.Prosper retained advisers to seek out around $150 million in capital before LendingClub's woes became public, one of the people said. The amount of capital Prosper is currently seeking remains unclear.

Prosper said on Tuesday it plans to raise rates on its highest risk borrowers to improve returns for investors.

It is the second rate increase the platform has made this year, following a rate hike in August 2015.Prosper cut more than a quarter of its staff earlier this month. The platform's loan volumes fell more than 10 percent in the first quarter of 2016 from the previous quarter.

(Reporting by Olivia Oran, Mike Stone and Lauren Hirsch in New York, additional reporting by Michael Erman; Editing by Meredith Mazzilli)