Credit Card Start-Up “Upgrade” Appreciates In Value To $6.28 Billion

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Upgrade is a fintech start-up that turns your credit card balances into installment loans. It has closed a fundraising round that valued the start-up at around $6.28 billion.

Upgrade has managed to raise $280 million in its Series F round, which was led by new investors Coatue Management and DST Global. The raise was a jump of 83% from a previous round done this year, that value the company at $3.43 billion.

The company’s revenue had seen a sharp growth of around 70% from July till October, which were the 2 periods of fundraising.

How Is Upgrade Different From The Traditional Cards?

The main product offered by Upgrade is a card that can turn your purchases into a fixed-rate installment loan. This is made them the newest company to benefit from such a trend in fintech that revolves around “buy now, pay later”.

Traditional cards have been charging more than 18% in a year while Upgrade starts at an 8.99% interest rate. This is the reason why they are among the fastest-growing cards in the country.

Renaud Laplanche, who is the CEO of Upgrade, has stated that the consumers were discovering the benefits offered by a product that offered them the convenience of a credit card but does not push them into more debts. The traditional cards have extremely high-interest rates excluding fees that make it a bad consumer product. All these cards were designed to keep these people in endless debts.

Consumer lending is still controlled by large credit card companies at banks that include JPMorgan Chase and Citigroup. They do not want to reduce their profits from their huge loan portfolios hence, have very little incentive to copy fintech’s friendly features.

Upgrade is making preparations to go public before 2023, as stated by the CEO, Laplanche.