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Upstart Raises $50 Million and Announces New Bank Partners
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Upstart Raises $50 Million and Announces New Bank Partners

Upstart Raises $50 Million and Announces New Bank Partners

Peter Renton·
Peer to Peer Lending
·Apr. 8, 2019·1 min read

One of the big announcements on day one of LendIt Fintech USA 2019 is from consumer lender Upstart. They have announced a $50 million equity raise as well as three new partners for their “Powered by Upstart” banking as a service program. Oh, and they are getting into credit cards.

First, the funding round. There are some new names to fintech in this round, most notably a subsidiary of Progressive Insurance. The other new names are Healthcare of Ontario Pension Plan and First National Bank of Omaha. Interestingly Upstart announced that their loans will be available on www.progressive.com in the near future as part of the insurance company’s Progressive portfolio of Advantage Products. That could be a huge new channel of customers for them.

On the bank partnership side, the three new partners Upstart announced today are First Federal Bank of Kansas City, Accion Chicago and the aforementioned First National Bank of Omaha who also provided equity capital.

Marc Butterfield, senior vice president of enterprise digital solutions and emerging business at First National Bank of Omaha had this to say about their new partnership with Upstart:

“We chose to partner with Upstart because their approach to modernizing lending is well aligned with FNBO’s focus on a customer-centric experience. Upstart’s AI/ML-based pricing engine and automation will allow us to profitably serve a broader set of customers, within a great digital onboarding experience, than we could before.”

The other interesting part of this multi-faceted news release was the announcement that Upstart is getting into credit cards. Now, they are not releasing their own credit card but they are partnering with BankMobile, where they have an existing relationship powering personal loans. In fact, this new product is already in production. Upstart partnered with BankMobile to develop two credit cards: the BankMobile Classic Mastercard and the BankMobile Rewards Mastercard, are available now via online application.

My Take

Upstart has certainly been busy and are building an interesting stable of bank partners. They are bringing their experience and track record in AI/ML underwriting models and enabling community banks to offer consumer loan products again. It will be interesting to see if they can duplicate the success they have had with personal loans into the credit card space.

Upstart CEO Dave Girouard along with two of their new bank partners, Marc Butterfield of First National Bank of Omaha and Robert Perrelli of TCF Bank, will be speaking about their new partnerships and more at LendIt Fintech USA 2019 tomorrow at 12pm.

  • Peter Renton
    Peter Renton

    Peter Renton is the chairman and co-founder of Fintech Nexus, the world’s largest digital media company focused on fintech. Peter has been writing about fintech since 2010 and he is the author and creator of the Fintech One-on-One Podcast, the first and longest-running fintech interview series.

    View all posts
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