San Francisco based neobank, Upgrade, today announced in a company press release that they’ve successfully raised $40m in a Series D funding round. The round was led by Santander InnoVentures and had participation from existing investors Union Square Ventures, Ribbit, Vy Capital, and Silicon Valley Bank and new investors Ventura Capital and Uncorrelated Ventures.
Upgrade said the funding will be used to ‘fuel the continued growth’ of their physical product, the Upgrade Card, and their soon to be launched mobile downloadable app, the Upgrade Account to bring them closer to their goal of offering an online and mobile banking experience that delivers exceptional value to their customers.
Renaud Laplanche, co-founder and CEO of Upgrade said: “We are thrilled to welcome Santander InnoVentures as a new shareholder. Our strategy of partnering with banks and credit unions of all sizes is delivering tremendous value to our partners and customers, and we are delighted to add one of the world’s largest banks to our partner roster.”
Upgrade is an online lending platform that aims to help people understand their financial credit situation while offering customers personal loans and their own credit card called the Upgrade Card.
The Upgrade Card has lower costs than traditional credit cards with no fees or unexpected payments and fixed-rate monthly payments to bring customers to balance down quicker resulting in less interest paid on an account while also allowing funds to be sent directly to a customers bank account.
The Upgrade Card has credit limits running from $500 to $20,000 and the company offer free credit monitoring and education tools to help their customers understand and manage their finances.
The neobank offers personal loans starting at $1,000 going up to $35,000 at low fixed rates with affordable monthly payments to help customers with their personal goals which might include refinancing credit cards, consolidating debt into fixed monthly payments, or covering required house maintenance.
The neobank offers a range of free tools for customers to access their credit viability, understand their credit score, get personalised recommendations on how to improve their credit health, and get weekly personalised updates and email alerts on their information.
Since launching in 2017, Upgrade claims to have delivered over $3bn in consumer credit through their suite of service and product offerings.
Upgrade joins a number of other FinTechs and finance providers in successfully raising capital with Varo raising $241m and freelancer banking app Lili raising $10m during the COVID-19 pandemic.
“We’re excited to support Upgrade in their next stage of growth,” said Chris Gottschalk, senior advisor at Santander InnoVentures, who will be joining the Upgrade board. “Upgrade is building a neobank with credit at its heart, which we believe is a smart strategy as credit represents 70% of banking revenue globally and is often the main reason customers seek banking services.”
Upgrade was founded in 2016 with a launch in 2017 and now has four offices representing different roles with San Francisco housing the headquarters, Phoenix being the operations center, and Chicago and Montreal being home to the Engineering Centres.
This funding round brings the total capital raised by the neobank to $200m since the platform launched with a valuation of $1bn.
