Upstart: 91% of loans fully automated

AI-based online consumer lending company Upstart just wrapped up a strong year, generating a tiny $2.8M net loss on $219M in revenue. Upstart was known for AI in the fintech industry before AI became the buzzword it is now. Ninety-one percent of the company’s loans in 2024 were fully automated with no human involvement, and 93% of instant approvals converted to funded loans.

Notably, a significant amount of their loan volume is generated by direct mail.

“Whenever our models get better, we tend to get more volume from partners, DM — direct mail converts better so that we can actually increase the amount of direct mail we send,” said CEO David Girouard.

While the company halted its earlier plans to add small business loans to its product mix, it still estimates the size of the market in its quarterly presentations. And according to that it’s an $895 billion market annually.

Analysts on the call liked what they heard about Upstart’s 2024 performance.

“2024 was a year of rapid quarter by quarter improvement for Upstart, and the fourth quarter clearly took the cake,” said Girouard. “Considering the weak environment we faced at the beginning of the year, we couldn’t have asked for a stronger finish. In Q4, our business grew dramatically across all our product categories on a sequential basis, delivered Adjusted EBITDA at levels not seen since the first quarter of 2022, and came within a whisker of returning to GAAP profitability.”