One industry that could be considered a prime candidate for innovation is health care spending, particularly financing elective health procedures. On Jan. 27, TechCrunch reported that loan servicing agency Prosper Marketplace bought elective health procedure lender American Healthcare Lending for $21 million, as that company looks to diversify its own lending program, as well as take advantage of a growing segment of the lending industry.
American Healthcare Lending was founded as a way for doctors and participating health facilities to offer loans of up to $100,000 for elective health procedures using an innovative “software as a service” model that kept costs down. Procedures would generally include cosmetic dentistry or plastic surgery, as well as fertility clinics.
“The health care industry is in the midst of a massive transformation that is impacting out-of-pocket expenses for millions of consumers,” said CEO Shaun Sorensen, in a statement quoted by BusinessWire.
The purchase by Prosper Marketplace would add to its $2.5 billion lending portfolio and open a new market for them in health care.
“This acquisition is an important part of our strategy to grow awareness and expand our product offerings and capabilities into new vertical markets,” said Aaron Vermut, Prosper’s chief executive, which was quoted by TechCrunch.
Prosper Marketplace started in 2013 loaning funds for credit card refinancing, car purchases, and home renovations. In 2014, the company moved over $1.6 billion in loans, a 350 percent-increase from the year prior with $205 million of that in December alone. In total, the company has lent to 250,000 borrowers, which calculates to roughly $10,000 per borrower. The company is also in a growth stage at the moment, having just come off a $70 million round of fundraising last May from investors including Phenomen Ventures, Institutional Venture Partners (IVP), and Francisco Partners, according to TechCrunch.