Upgrade Raises $40 Million in Latest Funding Round
Once again setting aside fears that the coronavirus crisis would cripple FinTech investment, another notable deal was announced this week. This time it was Upgrade disclosing new funding, with the San Fransisco-based company revealing a $40 million round.
Upgrade’s latest round — a Series D — was led by Santander InnoVentures, which is the VC arm of Spanish bank Santander Group. Additionally, returning investors Ribbit, Union Square Ventures, Vy Capital and Silicon Valley Bank along with new investors Uncorrelated Venture and Ventura Capital participated in the funding round. With the $40 million added to the tally, Upgrade has now raised a total of $200 since launching in 2017.
Led by former LendingClub CEO Renaud Laplanche, Upgrade has been a successful follow-up for the co-founder. According to the company, more than 10 million consumers have applied for either an Upgrade credit card or a loan. As a result, Upgrade has issued more than $3 billion in credit since its inception.
Speaking of the Upgrade Card, the company says that the injection of cash will be invested in further growing the product, which was first unveiled last autumn. The unique card allows customers to pay off their balances in equal, monthly payments and at a fixed rate. On top of that, the company will soon introduce their Upgrade Account — a mobile banking offering that it notes will boast “exceptional value to mainstream consumers.”
Commenting on the incoming funding and what it means for Upgrade, CEO Laplanche stated, “We are thrilled to welcome Santander InnoVentures as a new shareholder. Our strategy of partnering with banks and credit unions of all sizes is delivering tremendous value to our partners and customers, and we are delighted to add one of the world’s largest banks to our partner roster.” In return, Santander InnoVentures senior advisor and new Upgrade board member Chris Gottschalk remarked, “We’re excited to support Upgrade in their next stage of growth. Upgrade is building a neobank with credit at its heart, which we believe is a smart strategy as credit represents 70% of banking revenue globally and is often the main reason customers seek banking services.”
Fairly or not, it seems that Upgrade has been overshadowing Laplanche’s former company LendingClub in recent years. This latest funding announcement and the impending debut of the Upgrade Account will likely do little to change that impression. Moreover, although Upgrade once looked like it would be another version of LendingClub, it’s since established itself to be something quite different. In any case, both companies remain FinTechs worth watching and will have a big role to play in the space for some time.