Prosper acquires finance security company BillGuard

Steven Loeb · September 24, 2015 · Short URL:

BillGuard will be remaining in Tel Aviv, and will be growing its team as a result of the acquisition

With all the security problems plaguing the Internet these days, I barely trust any websites to keep me secure. That goes double, or maybe quadruple, for any that want access to my money. There's just too much risk, if you ask me.

Prosper, one of the most popular peer-to-peer lending marketplaces, seems to have realized that this may be something of a problem. So it went out and bought a company whose whole mission is personal finance security.

The company announced on Thursday that it is purchasing personal finance analytics company BillGuard. While no financial terms of the deal were disclosed, the New York Times is pegging the price at $30 million. 

Founded in 2010, the Tel Aviv-based BillGuard uses crowdsourcing and big data analytics to help consumers detect fraud and wrongful payment card charges.

It allows users to track their money, using a smart inbox and spending tracking. It also has a card location tracker. It will alert uses to suspicious activity on their card, gives them credit monitoring alerts and allows them to easily resolve issues with identity restoration, card concierges and theft insurance.

BillGuard has been downloaded over a million and a half times since its release.

Going forward, nothing will change for the company, Yaron Samid, co-founder and CEO of BillGuard, wrote in a blog post

"I know for some of my favorite products, acquisitions marked an end of startup culture and innovation. That’s not what’s happening here," he wrote. "We’re joining forces with another kick-ass startup that greatly values what we’ve built and who we are, and wants more than anything for us to keep it up. We love them for it. Aaron, Itzik, Josh, Tobias and the rest of our new Prosper family, thank you! We’re going to do great things together."

Samid called Prosper "one of my favorite companies" and said that, thanks to the acquisition, its "Tel Aviv product office is going to grow exponentially," with a slew of new hires.

For Prosper, the acquisition allows the company to offer its users a more complete product.

"Prosper Marketplace’s mission is to enhance financial well-being, and as we look to the future, we want to find ways beyond Prosper’s personal loan product to help people accomplish this goal. BillGuard helps us do this in a number of ways," Aaron Vermut, chief executive officer at Prosper Marketplace, wrote in his own blog post

"First, it helps us create a long lasting relationship with our customers by offering them a full suite of financial tools. It also gives us the  opportunity to lower our cost per acquisition, and to be in front of the customer when they are ready to make a credit decision."

There's also another aspect of this deal that benefits Prosper: it gets "access to the impressive talent pool in Tel Aviv, a technology hub that is on par with what we have here in Silicon Valley."

"The opportunity to build a team there that complements our already strong team in SF will help us further accelerate our product development," said Vermut. 

VatorNews has reached out to Prosper to find out more about what plans it has for the Israeli marketplace going forward. We will update this story if we learn more. 

BillGuard also has an office in New York City. The company has raised $16.5 million in venture funding from investors that included Bessemer Venture Partners, Khosla Ventures, Peter Thiel’s Founders Fund, Eric Schmidt’s Innovation Endeavors, IA Ventures and SV Angel. 

Founded in 2006, Prosper has been seeing some impressive growth recently. It facilitated the origination of $1.6 billion in loans through the its platform in 2014, a 350% increase from 2013, and it expects to more than double that in 2015.  To date, nearly $5 billion in loans have been transacted through the Prosper platform.

This comes at a time when two of the most high profile lending startups have begun to see big downturns. Lending Club, which is the biggest company in the space, has seen its shares fall nearly 44 percent since it went public late last year. It is now trading at $12.97 a share, below its $15 IPO price. 

On Deck, another publically Internet-based lender, has dropped 66 percent. It is trading at $9.20, well below its $20 IPO price.

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Money and lending is typically controlled by large institutions. Prosper wants to change that.