The acquisition of BillGuard by Prosper Marketplace has revealed the competitive nature of the peer-to-peer lending market. This is one of the most remarkable deals that have taken place in the fintech industry. The deal is said to have cost $30 million.
Prosper Marketplace is a P2P lender that was established in 2006. The firm offers alternative funding by way of personal loans for projects, debt consolidation, home improvement and car purchases, among other needs. Since establishment, the firm has facilitated loans of over $4 billion.
The app has a security feature that alerts users on suspicious activities on their credit cards.
Although in the same industry of fintech financing as Prosper, BillGuard operates a different form of business. The firm offers a personal finance app. The app enables users to track and analyze transactions within their bank accounts and credit or debit cards. The app has a security feature that alerts users on suspicious activities on their credit cards. This feature was what inspired the origin of the word “Guard” in the app’s name.
The cooperation between the two firms is very minimal, from an external perspective. The common characteristic between them is that they both serve the consumer market. In this regard, they have a common goal of helping their customers improve their finances through savings on their expenses or loans.
The deal has enabled Prosper to gain the customer base of the app onto their lending marketplace. It will also help the company to lower their cost per acquisition. This is because the customers will not incur referral costs, which have been constantly rising due to the increase in the number of P2P firms and marketplace lenders.
The deal also has another fascinating aspect in that BillGuard will continue operating as its own entity. The firm’s headquarters will remain unchanged in Tel Aviv. This means that Prosper will still allow BillGuard to continue innovating and expanding its central features that will improve their products and services in the consumer personal finance market. With this independence BillGuard will continue to increase its customer base, which is a plus for Prosper. Additionally, the data collected by BillGuard from its customers for credit scoring will also be beneficial to Prosper.
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