Fireside Chat: Insight into the U.S. Market with Aaron Vermut

Fireside Chat: Insight on the U.S. Market
Aaron Vermut, CEO, Prosper Marketplace, and moderator Peter Renton, Chairman & Co-Founder, Lendit

Mr. Vermut came to P2P lending after five years of running a broker-dealer firm for small hedge funds that was acquired by Wells Fargo. When he joined Prosper in 2012, $115 million in loans were originated on the platform. In 2015, that number is on track to hit $3.7 billion.

Mr. Renton asked how one scales revenue from $10 to several $100 million. The most important factor, according to Mr. Vermut, is the willingness to fail. Consumer lending is an incredibly complex business, he said. Mr. Vermut noted that when he joined the business, he took big risks, changing the whole corporate structure and underwriting strategy of the company. He also invested money in customer acquisition, aware that this marketing spend might not translate immediately into revenue. As the company moved further along on the experience curve, customer acquisition costs naturally went down, he explained.

Mr. Renton asked about new entrants to the industry and whether they make it harder to acquire customers. Mr. Vermut said that by focusing on operational excellence and an efficient process of getting customers through the funnel, new entrants, who mostly acquire their customers through paid search, do not pose a significant threat. Prosper continues to be a retail-driven business and as such will keep growing linearly and not exponentially like its institutional-driven peers, Mr. Vermut said. He added that the path to widespread adoption lies in publicly traded vehicles that wealth advisors will be able to sell to their customers.