BillGuard, a free personal finance service that uses Big Data analysis and crowd sourcing to identify bogus charges, has been racking up accolades since it launched in May. And now it’s pulling in big money too: $10 million from Khosla Ventures, Peter Thiel’s Founders Fund and Eric Schmidt’s Innovation Endeavors along with money from existing investors Bessemer Venture Partners and IA Ventures.
BillGuard, which previously raised $3 million, builds what it calls an anti-virus system for bills by analyzing the transactions of its members, who register their credit and debit card accounts with BillGuard, and flag questionable or erroneous charges. BillGuard also gathers mentions on social networks and forums, and combines that info with bank data and recent fraud activity to help inform its database. It’s then able to alert users about charges that may be unwanted or completely fraudulent.
Yaron Samid, founder and CEO of BillGuard, said the service has found unwanted or unauthorized transactions on 20 percent of card accounts, everything from real scams to merchants quietly tacking on extra fees. He said BillGuard has now saved users close to half a million dollars after analyzing more than $1 billion in transactions.
BillGuard is currently free, but it’s exploring two business models. It’s talking to a bunch of the top banks, who are looking at offering BillGuard through their online banking services and paying BillGuard on a per-customer basis. The first banks to incorporate BillGuard will probably do so in the first quarter of next year. The company is also building a merchant certification program that allows merchants to obtain BillGuard data and follow up directly with consumers who have complained of bad charges.
The company, which is mostly based in Israel with an office in New York, has been racking up awards including the “Best of Show” award at Finovate and the “Big-Data Startup of the Year” award at the Strata Conference. Those accolades along with good word of mouth has helped BillGuard grow despite no marketing budget. Samid, however, declined to say how many actual users BillGuard has right now.
I’ll be interested to see how much traction BillGuard gets in its first year, but I like the service and the way it’s using smart data analysis to create a better financial security service for everyone. If it can get deployed by banks, that should help solidify its position, and show the power of crowd sourcing when applied to financial security.