Lending Platform Upstart’s IPO Filing Reveals Earnings, Ownership

Lending platform Upstart filed on Nov. 5 for an initial public offering with plans to raise $100 million. The company plans to list on the Nasdaq with the ticker symbol of UPST.

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The San Carlos, California-based company was founded in 2012 by Dave Girouard, who previously managed Google‘s enterprise business. Its technology taps artificial intelligence and machine learning to price credit and automates the borrowing process.

Upstart has raised approximately $144 million in venture-backed funding in the past eight years, according to Crunchbase data. That included a $50 million Series D round in April 2019, led by The Progressive Corporation.

Results, earnings

Inside the S-1, the company said it transacted more than 620,000 loans that generated more than 9 million repayment events. Meanwhile, in the nine months ended Sept. 30, approximately 70 percent of Upstart’s loans were entirely automated, the company said.

Within its financial data, Upstart reported revenue of $164.1 million for year-end 2019, nearly triple the revenue from 2017 and 65 percent higher than 2018. Revenue in the first nine months of 2020 was $146.7 million, a gain of 44 percent over the same period last year.

The nine-month period in 2020 was Upstart’s first period of profitability, reporting net earnings of $4.5 million, after a net loss of $9.8 million for the same timeframe in 2019. That was despite a rough second quarter–due in part to COVID-19–in which the company said its partner banks reduced their lending, resulting in a 71 percent decrease in number of loans transacted and a 47 percent reduction in revenue for the second quarter compared to the same quarter in 2019.

Ownership

Stakeholders holding more than 5 percent as Upstart goes into the IPO include:

• Third Point Ventures (19.5 percent), led the Series C in 2015;
• Stone Ridge Trust (9.5 percent);
• Khosla Ventures (8.4 percent), led the Series B in 2014;
• Rakuten (5.3 percent), led the Series C extension in 2017; and
• First Round Capital (5.2 percent), led the Series A round in 2013.

Upstart hasn’t priced its offering yet, but Third Point Ventures stands to get one of the largest payouts if the IPO goes as planned. It is one of the largest shareholders next to Upstart CEO Girouard, who holds 22.1 percent.

Illustration: Li-Anne Dias