Online lender Upgrade has recently announced securing USD 165 million in a new funding round, which raises its valuation to USD 7.3 billion.

Investment Details

The financing was led by Neuberger Berman and also included LuminArx Capital Management. This marks the first time Upgrade has received capital since 2021.

Upgrade, initially focusing on small personal loans, has expanded its operations significantly to include checking and savings accounts, a credit card, credit health monitoring, and a buy now pay later (BNPL) service.

Cash Flow Positive and IPO Plans

Company officials stated that Upgrade turned cash flow positive in 2022. They also mentioned that the firm is currently preparing for an Initial Public Offering (IPO). However, before going public, they plan to secure additional capital to strengthen their balance sheet and create a new valuation to provide employee liquidity.

While traditional banks still dominate consumer lending, most of Upgrade’s clients are switching to fintech companies for more automated services. The company plans to enhance the customer experience across its various products, particularly focusing on users who joined through its BNPL service. Currently, its BNPL offerings cater mainly to the travel industry but have since expanded into home improvement and auto financing.