The online lending startup Prosper said on Friday that it had raised $50 million in new funding, a sum that sharply devalues the stock of what was once a high-flying tech unicorn.
Prosper was last valued by private investors as worth $1.9 billion; now the company is valued at $550 million, according to a person with knowledge of the latest fundraising event. Prosper is raising less money in this round than it did in both its 2015 and 2014 rounds, reflecting the tough terrain for alternative lending platforms these days.
“This investment is a strong signal of confidence in our business fundamentals and the momentum we are seeing right now,” said David Kimball, the CEO of Prosper, in a statement. “Over the past year, we’ve shown that we can build a sustainable business that continues to redefine the online lending experience for our borrowers and investors. We believe this partnership will open up additional opportunities for our business as we continue to grow.”
Prosper said last quarter that it had nevertheless done $775 million in loans and that transaction fees were increasing. The company said it had also recently streamlined operations and cut expenses to generate $8.6 million of Net Cash from Operating Activities last quarter.
But much of the peer-to-peer lending industry has has struggled, most prominently LendingClub, whose CEO resigned last year amid a damaging internal investigation. Prosper too had to replace its CEO last fall and laid off about 30% of its staff.
The new investor in Prosper will be LPG Capital, the person with knowledge said.
Previous backers include Sequoia Capital, Draper Fisher Jurvetson and Francisco Partners.
The expected downround was first reported this summer by The Information.
Update: This story has been updated with more information on LendingClub and Prosper’s net cash.
This article originally appeared on Recode.net.