LendUp Raises $150M To Serve Financially Underserved

LendUp has raised $150 million in Series B funding to expand its product reach and credit facility.

“Over the last two years we’ve been growing rapidly by increasing the number of U.S. states where LendUp loans are available,” said CEO Sasha Orloff. “With this latest round of funding, we’re expanding the platform to include national products that allow us to solve new challenges and meet the needs of more customers.”

The funding round was led by Susa Ventures and Data Collective and saw participation from eight other investors including Google Ventures, QED, Kapor Capital and Victory Park, which also provided the company a second credit facility, the company announced.

The new round of funding comes as the San Francisco, California-based company is gearing up to launch its new credit product “L Card,” which the company says has a potential that is 100 times bigger than the payday lending market — a space which the alt lender aims to disrupt with its software backed lending tools.

“The L Card brings best-in-class technology to a customer group that’s often overlooked. It’s the next phase of our business plan of creating innovative, transparent financial products for consumers with limited options,” said Orloff. “We’ve proven our approach works, and know there’s a huge demand, so we’re looking forward to our Series B helping us reach our next stage of growth.”

The L Card also provides its user with a whole new set of functionalities, which are unavailable with most credit card companies, including the ability to set budgets for utility and gas station purchases on their credit card.

With its new round of funding, the company is reenergizing its efforts to capture the section of lending market which is often labeled by banks as “too risky” for the lack of a standardized credit scoring system backing it.

To ensure the returns of its loans, the company evaluates its loan applicants by looking up information on their bank statements, public records and speciality bureaus, and it does so quickly through its machine learning technology, which is able to connect the dots and calculate the viability of lending to an applicant.

“If you’re below a 680, a bank can’t loan to you. But 56 percent of the country is below 680,” Orloff told TechCrunch in an interview. “LendUp’s goal is to take people locked out of the banking system and give them a change to build their credit score.”