Billguard Ltd. has raised $10 million in its second financing round. Khosla Ventures led the round, and was joined by Peter Thiel's Founders Fund, Eric Schmidt's Innovation Endeavors , and current investors Bessemer Venture Partners and IA Ventures. The company will use the proceeds to accelerate growth and support marketing, business development, sales and R&D.
BillGuard CEO Yaron Samid and CTO Raphael Ouzan founded the company in 2010. It raised $3 million in its first financing round. It won the runner-up award at TechCrunch Disrupt New York in May 2011. The company's product uses a crowd-sourced approach - harnessing the collective knowledge of millions of people posting billing complaints online and via a transaction flagging system directly in electronic statements akin to anti-spam technology - to identify deceptive, erroneous and unauthorized charges on credit cards.
BillGuard estimates that consumers lose tens of billions of dollars annually to such charges. The company is planning a phone bill protection app, a top requested feature. TechCrunch says that, since the product's launch in May, it has saved users $500,000 and that 20% of transactions examined had billing errors.
Samid said, "In 15 years of company building I have never seen consumers react this emotionally to a service, literally from the first login. BillGuard provides a peace of mind that can only come from the collective vigilance of millions of consumers."
Khosla Ventures founding partner Vinod Khosla said, "At Khosla Ventures we love entrepreneurs who dare to tackle large problems with disruptive, bottom-up methods. BillGuard is one of the most exciting recent examples of this."
According to IVC, BillGuard is Khosla Ventures' fourth investment in an Israeli start-up, following iSkoot (which was acquired by Qualcomm Inc. (Nasdaq: QCOM), Cogenra Solar Ltd., and HCL Cleantech Ltd.
Published by Globes [online], Israel business news - www.globes-online.com - on October 18, 2011
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