How this lender’s stock grew 1,900% in one year.
Published in · 9 min read · Feb 2, 2022
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Of all the many disruptive technologies out there, financial services tech is definitely one of the most promising long-term growth investment opportunities.
You may know we’ve been very bullish about investing in the fintech industry over the last year. We spent 2021 covering the public market debut of SoFi, the one-stop shop online bank, so let’s take some time to cover one of its competitors, another rising fintech star: Upstart.
We’re going to explore what Upstart is all about, including how it makes money through its unique lending solution, its valuation history and projections, what they offer their customers, and everything else you need to know to help you decide whether it’s a good investment for your growth portfolio.
Founded in 2012 by current CEO Dave Girouard with partners Anna Counselman and Paul Gu, Upstart was the first to leverage both modern tech and data science to automate much of the lending process. That process, which is used by lenders to minimize their risks associated with any given borrower, includes document review, fraud analysis, rate requests, servicing, and collections. In 2014, thanks to its robust and quick risk assessment algorithms, Upstart was also the first to launch next-day funding of loans, which meant borrowers could start using their money significantly earlier than ever before.
Despite the borrowers interacting directly with Upstart, the company itself isn’t a lender. Instead, the platform equips primarily small regional banks with artificial intelligence software packaged in an API, or application programming interface, that almost instantly assesses a potential borrower’s creditworthiness via complex algorithms and robust prediction models.
Having just 10 banking partners at the time of its IPO in 2020, Upstart has grown its client base to 30 lenders just over a year later. This impressive growth still leaves a lot of room for the lending platform and its stock to…
