Prosper Marketplace, one of the nation’s largest marketplace lenders, has agreed to purchase the consumer finance app maker BillGuard.
The San Francisco firm will pay $30 million in cash plus an undisclosed amount of stock, according to a source familiar with the deal.
BillGuard’s free smartphone apps offer fraud protection for consumers’ debit and credit cards, while also allowing users to track their spending by category. The firm sells additional services through its apps for $2.99 to $9.99 per month.
BillGuard, which is based in New York but has most of its staff in Tel Aviv, Israel, has more than 1.3 million registered users, according to a press release Thursday announcing the deal.
Users of the company’s iPhone and Android apps typically link at least one debit card or credit card to their accounts, which gives BillGuard a detailed understanding of its users’ financial habits.
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Prosper could use that data to market its loans to BillGuard users, according to Prosper Chief Executive Officer Aaron Vermut.
Prosper offers personal loans of $2,000-$35,000, often to consumers who are looking to consolidate existing debt at lower interest rates. Following the sale, Prosper would be able to make targeted loan offers to specific BillGuard users based on their individual financial profiles, Vermut said.
For example, a BillGuard user who has a lot of credit card debt might receive an offer to refinance that balance with Prosper.
Prosper, which does not currently have its own app, also sees the BillGuard acquisition as a way to engage more with its existing customers, and over time to sell more products to them.
“We don’t have a product that really drives daily engagement,” Vermut said.
The peer-to-peer lender has designs on a broader piece of the consumer finance market, including loans at the retail point of sale. BillGuard’s apps, which will be offered to Prosper’s existing customers, could give Prosper more opportunities to cross-sell products.
Prosper is also touting the deal as a way to bring aboard new engineering talent. The company plans to keep open BillGuard’s offices in Tel Aviv, where 21 of the firm’s 25 employees work.
“They represent truly world-class talent and bring a team and technology platform that will immediately accelerate our product development,” Vermut said in the press release.
The stock portion of the deal is designed to motivate BillGuard’s employees to stay with Prosper, according to the source familiar with the acquisition. BillGuard CEO Yaron Samid said that he and the rest of the app maker’s employees will remain with the company.
Samid said that BillGuard will be an autonomous business unit within Prosper, which he will head, and that the deal will allow the app maker to grow more aggressively.
BillGuard, which was founded in 2010, raised $16.5 million in three fundraising rounds between 2010 and 2014, according to Crunchbase.
The deal for BillGuard follows Prosper’s $21 million purchase in January of American HealthCare Lending, which provides financing to patients seeking elective medical treatments. That business has since been rebranded as Prosper Healthcare Lending.
Prosper, which is privately held, announced in April that it had raised $165 million in equity funding, which gave the company a valuation of $1.87 billion.