The process of obtaining a loan has long been fraught with many outdated steps and inefficient background checks. One company, Upstart Holdings, is revolutionizing this process entirely, harnessing AI and data to change up the requirements for getting a loan, as well as streamlining the steps, in order to get funds to customers more quickly and reliably.
Upstart has garnered acclaim for its unique ability to leverage AI to facilitate the loan process, paving the way for the future of the lending industry by removing the shortcomings often seen with large financial institutions. Its machine learning models are more accurately able to identify risk and approve applicants, defeating traditional models with their limiting credit-score-based lending structure.
Through its sophisticated technology, this ground-breaking fintech is able to collaborate easily with banks and financial institutions to facilitate loans for clients efficiently, accessibly, and with lower interest rates. Its efficacy benefits banks and financial institutions as well, by ensuring higher approval rates and lower loss rates. With Upstart, 99% of applicants receive access to funds in just one business day after the acceptance of their loan, which is unprecedented in the industry.
Co-founded in 2012 by Dave Girouard alongside Anna Counselman and Paul Gu, Upstart has turned a ripple into a tsunami, thanks to the relevance of the company amid the pandemic. Girouard is a Dartmouth graduate with an MBA from the University of Michigan. His first Silicon Valley job was at Apple for 10 years, before he joined Google working on what we now call Google Cloud. After meeting his co-founders there, Girouard founded his disruptive business, which went public in the last quarter. Today, he is a recently minted billionaire after the company shared blockbuster earnings that obliterated Wall Street expectations.
Despite the enormous success of late, Upstart’s growth doesn’t look to be heading toward a plateau. Last week the company announced that it would be moving into the automotive space, through an acquisition of Prodigy Software. Prodigy is the first end-to-end sales software that directly links car shoppers and dealerships digitally via its cloud-based automotive retail software. With more people going online for major purchases such as cars, this is a big deal for a market that sees almost $1 trillion worth of vehicles sold annually under finance.
Sound strategy, as well as proven management success as published in the company’s earnings report, indicate that Upstart is company to watch closely for investors. Having the jump on innovating AI-powered lending, catalyzed by its surge of growth, will pave the way for Upstart and the future of lending.