Upstart raises $50m investment and lands new bank contracts
Artificial intelligence (AI) lending platform Upstart has completed a $50 million equity investment round and agreed partnerships with three new banks, reports Jane Connolly.
The funding from Progressive Investment Company, Healthcare of Ontario Pension Plan and First National Bank of Omaha brings Upstart’s total raised to $160 million to date. Upstart will join Progressive’s portfolio of “Advantage Products”.
Upstart’s strategy is to partner with banks, offering its AI platform – with patent-pending risk modelling and automation – as a white-labelled lending application that banks can use to enhance their own lending programmes. The company has also announced new “Powered by Upstart” partnership agreements with First National Bank of Omaha, First Federal Bank of Kansas City and Accion Chicago.
“Credit is generally overpriced and unfairly distributed, because it relies on techniques developed before the advent of modern computing,” says Upstart co-founder, Paul Gu. “But technology and data science, in the form of AI, have the opportunity to change all of that.”
Upstart has originated more than $3.3 billion of loans in the last five years, grew revenues by about 80% in 2018 and reached profitability in the second half of the year. The company says that 60% of its originations in 2019 have been entirely automated and approved in real time.
Now expecting to expand its AI platform to other forms of credit, the company recently partnered with Customers Bank’s BankMobile division to launch two new credit cards, the first to be powered by Upstart.