Trade Finance Advice

Upstart

Upstart is a peer-to-peer lending platform. The founding team includes Dave Girouard, a former VP of Apps for Google, Paul Gu, a Thiel Fellow, and Anna Mongayt, who worked for 5 years at Google where she ran global Enterprise Customer Programs and Gmail Consumer Operations. Upstart first launched with an Income Share Agreement (ISA), which enabled individuals to raise money by agreeing to share a percent of their future income. Individual profiles were listed on the site for 60 days, during which investors would make offers to upstart to give them money in exchange for a percent of their future income for 5 or 10 years. In May 2014, the company stopped offering this funding option In April 2014, Upstart began offering a traditional 3-year loan. In addition to using traditional underwriting criteria—FICO score, credit report and income—Upstart uses its income prediction model, which considers academic variables— colleges attended, area of study, GPA, and standardized test scores—and work history to develop a statistical model of the borrower’s financial capacity and personal propensity to repay. Upstart raised a $1.75M seed round from First Round Capital, Kleiner Perkins Caufield & Byers, NEA, Google Ventures, Crunchfund and Mark Cuban. They subsequently raised a series A round of $5.9M which included new investors Eric Schmidt, Marc Benioff, Khosla Ventures, Founders Fund, and Collaborative Fund Jessica Jackley and Bob Kerrey serve as advisors to the company. Upstart is a for-profit company which makes its money by charging borrowers an origination fee between 1% and 6% of the amount they borrow. It was launched in April 2012 and its beta site went live in August 2012. Upstart has thousands of borrowers and a blend of both retail and institutional investors. The company issues personal loans ranging from $3,000- $25,000.

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