Upgrade just closed a massive $165 million funding round that values the fintech startup at $7.3 billion, marking its first capital raise since 2021. The LendingClub founder's latest venture is now preparing for an IPO within 12-18 months while expanding beyond personal loans into a full-service financial platform that's pulling customers away from traditional banks.
The fintech funding frenzy just got another billion-dollar player. Upgrade, the digital lending platform founded by former LendingClub CEO Renaud Laplanche, announced Thursday it secured $165 million in fresh capital that values the company at $7.3 billion.
The round, led by investment firm Neuberger Berman with participation from LuminArx Capital Management, represents Upgrade's first funding raise since 2021. But this isn't a desperation play - the company has been cash flow positive for three years running.
"We've been cash flow positive over the past three years, so we didn't have to do a new round," Laplanche told CNBC in an interview. The capital raise serves dual purposes: beefing up the balance sheet ahead of a planned IPO and providing employee liquidity without waiting for public markets.
The timing couldn't be better for Upgrade's public debut ambitions. Laplanche, who took LendingClub public in 2014, said the company is "probably 12 to 18 months away from an IPO at this stage." That timeline puts Upgrade in prime position to ride the current wave of fintech IPOs, following Chime's successful June debut and Klarna's market entrance last month.
Upgrade's growth trajectory supports the hefty valuation. The company's revenue has more than doubled since its last fundraise, with annualized revenue surpassing $1 billion in May. That's impressive scale for a startup that began in 2016 offering relatively small personal loans in the same market LendingClub pioneered.
But Upgrade isn't just another lending clone. The platform has evolved into a comprehensive financial services suite offering checking and savings accounts, credit cards, credit monitoring, and buy-now-pay-later options. The company made a strategic $100 million acquisition of BNPL travel specialist Uplift in 2023, positioning itself uniquely in the travel financing space.
"This year, we're focusing mostly on making the customer experience make sense across multiple products," Laplanche explained. The strategy appears to be working - customers are migrating from traditional banks like JPMorgan Chase to take advantage of Upgrade's automated, faster services.
