VC Deal of the Day – Upstart Raises $32.5M Series D Round

The marketplace lending arena is on an absolute tear lately.

Earlier this week, Prosper announced a $5B loan purchasing agreement, and that deal was facilitated by our friends at fintech investment bank FT Partners in San Francisco.  Now, Upstart, another online P2P lender, has announced the close of a $32.5M Series D round, with Rakuten as lead investor.

It’s all rather exciting as over the summer last year there was a lot of chatter that marketplace lending was all but dead, in the wake of the Lending Club debacle.  Now we’re seeing that it’s anything BUT, and investors are hungry to flock back in to the category for the promise of yield and deal flow.  We’re not the least bit surprised, as these lenders still fill a major void for businesses and consumers that the banking sector is still not able to perform, post Dodd-Frank.

Per their website, “(s)ince launching peer to peer (P2P) lending product in May of 2014, more than $600 million in Upstart loans have been originated, and we’ve experienced double-digit month-over-month growth.

What’s behind that incredible growth? We go beyond FICO scores to finance people based on signals of their potential, including schools attended, area of study, academic performance, and work history. Our proprietary underwriting model identifies high-quality borrowers despite limited credit and employment experience – what we call “future prime” borrowers.”

In addition on Friday (3/3) they announced the launch of their new white label software and services platform for other lenders, utilizing their consumer lending platform.  The founders are ex-googlers and their website claims that theirs is “the first lending platform to leverage modern data science and technology to power credit decisions, automate borrower verification, and deliver a superior borrower experience.”

We think this is a great move toward diversification for the company, and the most recent capital raise will be utilized to grow this division, per TechCrunch.

Total Equity Funding
$85.65M in 5 Rounds from 14 Investors

Most Recent Funding
$32.5M Series D on March 2, 2017

Read Full Listing at Crunchbase