It was back in September of 2015 when Prosper announced they had purchased the personal finance analytics company called BillGuard for $30 million. At the time this acquisition made sense, it was a way for Prosper to maintain engagement with their customers and prospects beyond just a loan transaction.
BillGuard was relaunched in March of last year as Prosper Daily with a focus on financial well-being. By downloading the app users could keep track of their spending on their credit card and bank accounts, protect their identity and track their credit score.
Alas Prosper Daily will shortly be discontinued. Prosper told me that as of August 31 Prosper Daily will be no more. I reached out to David Kimball, the CEO of Prosper to get his reasoning behind this move.
He told me that the decision was based around focus. While the app was great it was not consistent with the core focus of their business. It was more of an ancillary service and Prosper has become laser focused on their core business this year. Existing users will be notified about a similar app, called Clarity Money, where they can transition and continue to track their finances.
Prosper has retained a few people on the Prosper Daily engineering team and this move will enable them to work on creating a better borrower and investor experience. Improving the web-enabled mobile experience is a key goal for that team now as mobile remains a central part of their development efforts. David didn’t rule out releasing another app at some point in the future but it would be different to the Prosper Daily app.
I asked David about how their business was doing overall and he responded with a great deal of enthusiasm. While he couldn’t share details yet I heard on the grapevine that Prosper’s originations came in around $775 million in Q2. This would be up significantly from the $586M they did in Q1. I also heard that they were cash flow positive in Q2. No wonder David feels that Prosper is on the right track today and they are well on their way to building a sustainable and profitable company.
Despite the closure of Prosper Daily David told me their mission remains unchanged: they are looking to advance the financial wellbeing of all their customers. Today, this is done primarily through their personal loan product.
My Take
I see where Prosper is coming from, they need to make their core business successful. I thought it would be a good customer acquisition tool and while Prosper would not share their engagement numbers Prosper Daily was clearly was not pulling its weight there.
It is interesting that new companies like Upgrade are making a big push to engage with their customers through an app and MoneyLion continues to add new features to its popular app. The world is moving to mobile, that is not in dispute, but clearly there are different ways to engage customers and prospects in this medium.
Given Prosper’s challenges over the past year and a half I completely endorse this renewed focus on their core business. If they knew back in 2015 what was in store for them in 2016 I don’t think they would have purchased BillGuard. I still think that engaging with their target market through an app is a good idea and I like the efforts of MoneyLion and Upgrade in this area. But Prosper needs to become a profitable business with their core product, personal loans, and it looks like they are on track to do just that.
Peter Renton is the chairman and co-founder of LendIt Fintech, the world’s first and largest digital media and events company focused on fintech. Peter has been writing about fintech since 2010 and he is the author and creator of the Fintech One-on-One Podcast, the first and longest-running fintech interview series. Peter has been interviewed by the Wall Street Journal, Bloomberg, The New York Times, CNBC, CNN, Fortune, NPR, Fox Business News, the Financial Times, and dozens of other publications.