Upgrade CEO Renaud Laplanche speaks at a conference held in Brooklyn, New York in 2018.
Alex Flynn Bloomberg via Getty Images
Upgrade, the online lender started by LendingClub founder Renaud Laplanche, has raised a new round of funding that values the startup at $7.3 billion.
The company announced in a press release Thursday that it has raised $165 million in a round led by Neuberger Berman with participation from LuminArx Capital Management. Laplanche, who founded Upgrade in 2016, said this is the first time the company has raised funding since 2021.
“For the past three years, our company has been cash flow positive, so we didn’t need to raise another round,” Laplanche said in an interview.
Upgrade operates in a marketplace similar to LendingClub and began offering relatively small personal loans. The company has since expanded deeper into financial services, including checking and savings accounts, credit cards, credit monitoring, and buy now, pay later services. In 2023, Upgrade acquired BNPL travel company Uplift for $100 million.
Laplanche said revenue has more than doubled since the company’s last round of funding, with annual revenue topping $1 billion in May.
Mr. Laplanche, who took LendingClub public in 2014, said Upgrade is aiming for an IPO but wants additional capital on its balance sheet in the meantime. He said the company is also establishing a new valuation as it begins offering employee liquidity.
“At this stage, it’s probably 12 to 18 months before an IPO,” he said. “So we wanted to make it possible for anyone to sell some stock right now, without waiting for the IPO.”
While consumer lending is still dominated by traditional banks like JPMorgan Chase & Co., Laplanche said a large portion of Upgrade’s customers are moving away from traditional banks to take advantage of more automated and faster services.
“This year, we’re primarily focused on making sure the customer experience makes sense across multiple products and making sure that customers who may have participated in an upgrade through a BNPL product have a very seamless experience,” Laplanche said.
The company also focuses on home improvement and auto financing, with total loans exceeding $2 billion and $1 billion, respectively, earlier this year.
Competition is increasing across the board.
Chime, which offers a variety of online banking services, went public in June. SoFi is growing in popularity. Fintech companies, including PayPal and Square parent Block, are also adding more banking services to their portfolios.
Among BNPL are Affirm and Klarna, which had an IPO last month.
Laplanche said Upgrade’s focus at BNPL is on the travel industry through relationships with airlines, cruise lines, car rental companies and hotels.
“This is a fairly unique industry, unlike retail, where Klarna and Affirm are strong,” he said.
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