Upgrade closes biggest funding round to date with $105m Series E

Upgrade, the alternative lending platform founded by ex-lending Club CEO Renaud Laplanche, has closed a $105m Series E funding round valuing the business at $3.3bn.

The San Fransisco based firm, which launched just four years ago, sits somewhere between an alternative lender and banking platform. It offers credit to mainstream consumers, primarily through its Upgrade Card, which seeks to compete with credit cards.

Balances are automatically turned into a fixed-rate instalment plan, cardholders then receive rewards as they pay down their balance. It also has a card offering rewards in Bitcoin.

Laplanche, was both founder and the former CEO of Lending Club, but was forced to resign as CEO in May 2016, after an internal review found that $3m in loans had falsified dates and were therefore mis-sold to the investment bank Jefferies. 

Laplanche went on to launch Upgrade in 2017. Early investors in Upgrade included Apoletto, Credit Ease, FirstMark Capital, Noah Holdings, Ribbit Capital, Sands Capital Ventures, Silicon Valley Bank, Union Square Ventures, Uprising and Vy Capital.

Upgrade last raised cash back in June 2020 with a $40m Series D funding round from investors including Santander InnoVentures.

This latest funding was led by Koch Disruptive Technologies (KDT), an investment arm of Koch Industries, with participation from new and existing investors including BRV and Ventura Capital advised by Julius Baer.   

“We are thrilled to partner with KDT,” said Renaud Laplanche, co-founder and CEO of Upgrade. 

“We have experienced unprecedented growth and profitability this year, and the additional capital will enable us to further establish Upgrade Card as a mainstream credit card and continue designing innovative products that benefit consumers”.

“We are seeing rapid innovation in banking, and believe fintech, and neo banks in particular, will profoundly transform the banking industry to the greater benefit of consumers” said Byron Knight, Managing Director at KDT. 

Upgrade has lent c.$7bn of credit to consumers through cards and loans since inception in 2017 and says it is on track to deliver a further $7bn in 2021.