Upstart Funded $9M in Small Business Loans in Q3
They’re known as a consumer fintech lender but last quarter Upstart also originated $9M in small business loans. It’s a new market it entered into this past June that coincided with revelations that the company is struggling in its core lending divisions due to adverse market conditions that led to a 90% drop in its stock price. Nevertheless, despite just laying off 7% of its workforce, Upstart sees small business lending as a growth opportunity.
“Well now we’re close to $10 million in loans originated and the team is rapidly shipping improvements as we look to refine that product,” said Upstart CEO David Girouard during the quarterly earnings call. “While the financial impact of these upgrades to our products is muted in the current environment, we’re confident that they’ll set us up for a giant leap forward once the economy and credit markets normalize.”
Upstart considers small business lending to be a $644B/year market, according to the quarterly earnings presentation. When questioned if it made sense to be investing in this business versus just trying to manage expenses in the near term, Girouard said “the way we think about that is we would like to, to the extent possible, continue to invest or even increase investment in the future products because that’s obviously what our franchise is built on and what will lead to significant growth in the future.”
Upstart set a record in Q3, claiming that 75% of all the loans made on its platform during the quarter required no human intervention.Last modified: November 9, 2022