What's Happening?
Upgrade, an online lender founded by Renaud Laplanche, has raised $165 million in a new funding round, valuing the company at $7.3 billion. The round was led by Neuberger Berman with participation from
LuminArx Capital Management. Upgrade, which started by offering personal loans, has expanded into financial services including checking and savings accounts, credit cards, and buy now, pay later options. The company acquired BNPL travel company Uplift for $100 million in 2023. Upgrade's annualized revenue surpassed $1 billion in May, and the company is considering an IPO within the next 12 to 18 months.
Why It's Important?
Upgrade's significant valuation and expansion into various financial services highlight the growing influence of fintech companies in the consumer lending market, traditionally dominated by banks like JPMorgan Chase. The company's focus on automated and faster services is attracting customers from legacy banks. The funding round provides Upgrade with additional capital to strengthen its balance sheet and offer employee liquidity ahead of a potential IPO. This development underscores the competitive landscape in fintech, with companies like Chime, SoFi, PayPal, and Square expanding their banking services.
What's Next?
Upgrade is focusing on enhancing customer experience across its product offerings, particularly in the buy now, pay later sector within the travel industry. The company aims to provide a seamless experience for customers joining through various products. As Upgrade prepares for a potential IPO, it will continue to expand its services and improve its financial performance to attract investors and compete with other fintech firms.
