SAN FRANCISCO—On Wednesday, June 17, Upgrade Inc., a San Francisco-based financial technology startup, announced that it has secured $40 million in its most recent investment round, which makes it a unicorn company—a private company with a $1 billion valuation.
As of June 2020, Upgrade is joining a group of over 400 unicorn companies worldwide. The latest funding increases the company’s total funding pool to $200 million since it was founded in 2017.
Upgrade is an online banking service that sells consumers credit through loans and cards. The company also offers financial advising. The company is a self-declared “neobank,” meaning it does not have any in-person locations, but operates completely online. According to the company, since its launch, over 10 million customers have applied for Upgrade credit and it has delivered over $3 billion in credit cards and loans.
The $40 million sum will be used to grow the Upgrade Card and to launch Upgrade’s mobile banking product.
Longtime investors of Upgrade include venture capital firms like Union Square Ventures, Ribbit Capital, and Vy Capital. Upgrade saw new investing partners enter the pool like Ventura Capital and Uncorrelated Ventures.
The investor leading the most recent round of funding was Santander InnoVentures, a $200 million Spain-based venture fund established in 2014. It is also an investor of Santander Bank and has become a new shareholder of Upgrade.
In the face of the COVID-19 pandemic, Upgrade co-founder and CEO Renaud Laplanche told the San Francisco News on Thursday, June 18, that the company fared well. Customers continued to pay their loans and credit cards, which allowed the business to keep stable amid the economic disruptions that the pandemic inflicted.
In response to the pandemic, Upgrade lowered payments for customers who were financially impacted and introduced a contactless credit card. The new credit card operates through Apple Pay and Google Pay in order to help consumers limit physical money exchanges that could leave them to susceptible to virus transmission.
With respect to the future of the company, Laplanche told the San Francisco News, “Our goal is to continue offering affordable and responsible credit and banking products to a broad audience. With the backing of one of the top 10 global banks, we believe we are in a great position to fulfill that mission.”