John Mack-Backed Data Startup Announces New Funding and Partners

(Bloomberg) -- PeerIQ, a startup tracking loans originated through marketplace lenders, has secured $12 million in additional funding and announced a partnership with TransUnion that will give it access to more traditional credit data.

The move is the latest in a series that have blurred the lines between traditional finance and marketplace lenders, which once sought to bypass big banks by using new technology to directly connect borrowers to lenders. Lending startup On Deck Capital Inc. partnered with JPMorgan Chase and Co. in 2015, while Wall Street has been securitizing loans originated through online platforms.

PeerIQ has tapped $12 million from credit-score provider TransUnion, a venture capital fund run by Hearst Corp., and Macquarie Group Ltd., along with existing investors including former Morgan Stanley CEO John Mack, it said in a statement on Wednesday.

‘Archaic' Market

Mack, who is on the board of LendingClub Corp., one of the biggest marketplace lenders, said the new funds will help PeerIQ to “reboot” an “archaic” securitization market. Shares of LendingClub have yet to recover following an internal probe into a botched loan sale.

PeerIQ will now be able to analyze more than $13 trillion worth of loans rather than tens of billions, according to founder Ram Ahluwalia. “The biggest part of this is that we are significantly boosting the number of loans that we'll be able to provide data on due to the partnership with TransUnion,” he said in an interview.

The firm declined to comment on the valuation, but said it was higher than the seed round it raised nearly two years ago. The funding comes with new board members as Steve Chaouki of TransUnion and Shea Wallon of Hearst take on seats. Glenn Hubbard, Dean of the Columbia University Graduate School of Business, is joining as an investor but not the board.

Ron Suber, founder of Prosper Marketplace Inc., a rival marketplace lender, said traditional financial firms will continue to partner with startups. “There are already a number of partnerships being formed in this space, and the trend is only beginning,” he said in a phone interview. “The incumbents need to link up to this new ecosystem.”

To contact the reporter on this story: Julie Verhage in New York at jverhage2@bloomberg.net.

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Tracy Alloway, Robert Brand