LendUp is a financial technology company that provides payday loans and installment loans, as well as financial education, access to credit reporting and gamification for responsible lending behavior. The company also issued credit cards through its LendUp Card Services division, which ultimately became Mission Lane LLC. The company is licensed as a payday lender in 24 states.
Founders
LendUp's co-founders are step brothers Sasha Orloff and Jake Rosenberg. Through school and early jobs they went separate ways. Orloff worked in consumer credit and then venture capital at Grameen Bank, World Bank and Citi. Following an internship at 16, Rosenberg became Yahoo! employee #80 and stayed for more than a decade, before joining Zynga as a platform CTO at 29. In the summer of 2011 Orloff asked Rosenberg to join him to found LendUp. They sought to solve problems with the financial services industry, which Rosenberg claimed could be solved through technology.
Funding and board advisors
LendUp graduated out of the Y Combinator batch of 2012. It has received $325 million in equity and debt financing from PayPal,Kleiner Perkins Caufield & Byers, Google Ventures, Andreessen Horowitz, Alexis Ohanian and QED among others. In August, 2016 LendUp announced its Series C round of equity, led by Y Combinator.In March, 2017, LendUp announced it received a $100 million credit facility from Victory Park Capital and surpassed $1 billion in loan originations. Nigel Morris, co-founder of Capital One and QED Investors, serves as LendUp's Board Chair. Other Board members include QED co-founder Frank Rotman, an early Capital One Financial Corp. executive and its long-time chief credit officer, and Blake Byers of GV.Board advisors include Carrie Dolan, Ali Rowghani, and others.
History
Like other payday loan companies, LendUp loans to customers that banks usually decline, giving borrowers with poor credit scores access to credit cards and short term loans. Many of the loans offered by the company are advertised as an alternative to payday loans for customers, but carry interest rates comparable to other payday lenders. LendUp's two Visa cards are issued by TAB Bank and Beneficial State Bank. They feature longer-than-usual grace periods before late fees kick in, and interest rates range from about 20 to 30 percent on credit lines up to $2,000. The card business is growing more quickly than the firm's lending product. LendUp has called its customers “the emerging middle class.” Its customers generally have credit scores below 680. In September 2016, LendUp was fined by the Consumer Financial Protection Bureau for charging illegal fees, miscalculating interest rates and failing to report information to credit bureaus. The company agreed to pay $6.3 million in penalties and customer repayments.. In May 2017, LendUp announced plans to quadruple the number of credit cards available to consumers through its partnership with Beneficial State Bank. As of May 2018, the company had surpassed this goal. In June 2017, LendUp and the Aspen Institute Financial Security Program launched Finance Forward, alongside Mayor Stephen K Benjamin of Columbia, SC. Finance Forward is a multi-city event series that brings together elected officials, businesses, community advocates and nonprofit leaders to identify and advance actionable solutions to the growing problem of income volatility in the U.S. In November, 2017, the company announced that former Tesla executive William Donnelly joined as CFO. In January 2019, Anu Shultes was named CEO, replacing Orloff. In 2020, the company announced that it had passed $2 billion in consumer loans through its digital lending platform.
