from the November 2015 issue

San Francisco-based Prosper Marketplace has acquired Israeli company BillGuard, which has a popular financial analytics product.

Israeli startup BillGuard has been acquired by peer-to-peer lending company Prosper Marketplace. No financial terms were disclosed but market sources believe the firm was valued at $40-50 million, part of which was paid in cash and the rest in Prosper stock.

Tel Aviv-based BillGuard helps its users track, manage, and protect their finances and credit. It was purchased by the San Francisco-based online lender, which hopes to integrate the former's financial analytics suite into the toolkit it offers its borrowers and investors.

"This will be a transformative acquisition for Prosper Marketplace and for the marketplace lending industry. Until now, nobody has brought together marketplace lending and personal finance management to deliver an offering that truly empowers, protects and educates consumers," said Prosper CEO Aaron Vermut.

BillGuard, founded in 2010 by Yaron Samid and Raphael Ouzan, has 1.3 million registered users and has flagged more than $70 million in unauthorized charges to its clients. Its Google Play and App Store iterations have won multiple industry awards; Google even named it as a Best App of 2014.

It has raised $16.5 million from several investors, including Innovation Endeavors, Khosla Ventures, Bessemer Venture Partners, and Ourcrowd.

"Both BillGuard and Prosper Marketplace are focused on empowering consumers to be financially secure, smart and successful," said BillGuard CEO Yaron Samid. "Joining forces means that BillGuard can continue to innovate while contributing to the evolution of Prosper Marketplace as a full-service financial management company."

Prosper, valued at $2 billion, is in the midst of the IPO process. It has raised more than $350 million, including a massive round of $165 million in April. It hosted $1.6 billion in loans in 2014 and expects to double that figure in 2015, after growing 350% from 2013.

"Prosper's explosive growth can be attributed to providing a truly consumer-focused alternative to traditional bank lending," said BillGuard CTO Raphael Ouzan. "Our goal is to develop BillGuard from within Prosper to become a comprehensive financial wellbeing app, offering greater transparency and intelligent recommendations that empower consumers to make smarter financial decisions."

Our combined technologies, and product portfolios to deliver leading end-to-end intelligent interconnect and processing solutions to data centers and wide area networks. The new and emerging Web 2.0 and cloud applications that influence our day-to-day lives depend on fast data movement and processing. Mellanox's interconnect provides the fastest and most-scalable solution for moving data within the data center, allowing the continuous development, use and expansion of these applications. EZchip's processing solutions allow users to process and analyze, at wire speed, data both within and outside the data center. The solutions from the combined company will enable data center customers to meet the growing demands of data-intensive applications. We expect that the acquisition of EZchip's technologies and team will better position us to offer further capabilities for smarter interconnect and processing solutions at 100Gb/s and beyond. As our second significant acquisition in Israel, we are confident in our ability to effectively integrate the talented teams from EZchip and Mellanox. We are looking forward to work together to build a successful company."

EZchip CEO Eli Fruchter said, "Joining forces with Mellanox represents numerous synergies that create a true powerhouse for connectivity and processing. With Mellanox's leading layer 1 - 3 connectivity solutions for data centers and EZchip's leading layer 3 7 processing solutions for carrier networks, the two companies complement each other in technology, products, markets served and customers. Together, we enable a multitude of layer 1 through 7 solutions for data centers and carriers."

The combined businesses currently have 2,400 employees, and have generated combined revenue of $668 million for the twelve months ended June 30, 2015.

The transaction is projected to close in the first quarter of 2016, subject to the completion of certain closing conditions. Mellanox expects the transaction to be non-GAAP accretive from day one.

J.P. Morgan acted as exclusive financial adviser in the deal and provided a financing commitment to Mellanox and Herzog Fox & Neeman and Latham & Watkins LLP acted as Mellanox's legal counsel. Barclays Bank PLC and an affiliate provided investment banking services to EZchip in relation to its proposed acquisition by Mellanox.

Reprinted from the Israel High-Tech & Investment Report November 2015

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