Online Lender Prosper to Help Track Your Money With Acquisition

  • Prosper to pay $30 million plus equity for BillGuard
  • CEO says deal will increase engagement with borrowers

Prosper Marketplace Inc., the online lending pioneer, is making its biggest acquisition yet to play a more central role in customers’ lives: managing their finances.

The closely held company said Thursday it’s buying BillGuard, the maker of a popular app that monitors users’ spending and alerts them to fraud in their accounts. Prosper Chief Executive Officer Aaron Vermut said in a phone interview that his firm will pay $30 million in cash for the Tel Aviv-based venture, plus some equity.

The deal is Prosper’s latest effort to differentiate itself and give customers more reasons to interact with its services. Rival online lending marketplaces have proliferated in the U.S. in recent years, offering to arrange loans for people and businesses to refinance debts or make big purchases. While Prosper is among the largest in the group -- originating some $1.6 billion in loans last year -- it still trails LendingClub Corp., which sold shares to the public in December.

Buying BillGuard is part of “an engagement strategy,” Vermut said. “It will create a more trusted, long-term and meaningful relationship with borrowers.” While BillGuard will be run as a separate entity, the acquisition may help boost lending and will bring new engineering talent to the San Francisco-based company, he said.

In January, Prosper announced its first acquisition, paying $21 million for a company in Utah that helps arrange loans for medical procedures. In April, Prosper raised $165 million from investors led by Credit Suisse Group AG’s asset-management arm. Some of that money is being used to buy BillGuard, Vermut said.