Upstart, the leading artificial intelligence (AI) lending platform, today announced a $50M equity investment from Progressive Investment Company Inc., Healthcare of Ontario Pension Plan, and First National Bank of Omaha.
Upstart has raised more than $160M since inception and has more than $100M in cash and equity capital on hand. Additionally, Upstart will be the newest offering in the Progressive portfolio of Advantage Products, which are third-party products offered to meet consumers’ changing needs. Upstart loans will be available through www.progressive.com in the near future.
“We started on this journey because credit is not just a cornerstone of our economy but a fundamental ingredient in the lives of Americans,” said Dave Girouard, Upstart co-founder and CEO and former president of Google Enterprise. “For hundreds of years, credit has represented opportunity and mobility for those seeking what’s next in their lives. Whether it’s to learn a new skill, to relocate to a new city, to start a new business, or to buy a new home or car, the price of credit is the price of opportunity and mobility. It’s the price of what’s next.”
Upstart co-founder Paul Gu added, “Credit is generally overpriced and unfairly distributed, because it relies on techniques developed before the advent of modern computing. But technology and data science, in the form of AI, have the opportunity to change all of that.”
After more than $3.3B in loans originated in the last five years, Upstart has demonstrated loss rates less than half those of peer platforms for borrowers with similar FICO scores. Furthermore, a study comparing Upstart’s model to those of several large U.S. banks showed that Upstart could cut their loan losses by three-quarters or almost triple their approval rates.*
Thus far in 2019, more than 60% of Upstart originations were entirely automated and approved in real time, an unprecedented feat in installment lending. On the back of strong unit economics and exceptional credit performance, Upstart grew revenues by about 80% in 2018 and reached profitability in the second half of the year.
Upstart’s business is designed not to compete with banks but to partner with them. Upstart launched its first partnerships with Customers Bank and its BankMobile division. Today, the company announced it has signed “Powered by Upstart” partnership agreements with First National Bank of Omaha, First Federal Bank of Kansas City and Accion Chicago. With Powered by Upstart, banks and other lenders can leverage Upstart’s AI platform in the form of a white-labeled lending application to power their own lending programs. The Powered by Upstart platform allows banks and other lenders to enforce their own credit policy and lending terms while benefiting from Upstart’s patent-pending risk modeling and automation.
“We chose to partner with Upstart because their approach to modernizing lending is well aligned with FNBO’s focus on a customer-centric experience,” said Marc Butterfield, senior vice president of enterprise digital solutions and emerging business at First National Bank of Omaha. “Upstart’s AI/ML-based pricing engine and automation will allow us to profitably serve a broader set of customers, within a great digital onboarding experience, than we could before.”
“Our mission at First Federal Bank of Kansas City is to help people build a better financial future,” said J.R. Buckner, president and CEO of First Federal Bank of Kansas City. “Fulfilling this mission means we must find innovative new ways to more effectively engage with current and prospective customers. Our partnership with Upstart is a key part of this strategy and will allow us to extend our products and services to a broader customer base that is more digitally savvy.”
“Accion Chicago’s mission is to help neighborhood entrepreneurs grow, which is why we provide our low-cost microloans to minority- and women-owned businesses who create jobs and wealth in underserved communities throughout Illinois and Indiana,” said Brad McConnell, CEO of Accion Chicago. “We believe that partnering with Upstart is the most creative, careful, and cost-effective way to lend to these inspirational small business owners that other lenders overlook.”
While personal loans are the fastest growing segment of credit, they’re far from the largest. With this equity round completed, Upstart expects to expand its AI platform to other types of credit. The company recently launched the first ever Upstart-powered credit cards with Customers Bank’s BankMobile division. Upstart partnered with BankMobile to develop two credit cards: the BankMobile Classic Mastercard and the BankMobile Rewards Mastercard, both available now via online application.
“We were excited to partner with Upstart as their vision of making credit more accessible aligns with our focus on low-cost banking services to low/middle-income Americans who have been left behind by the high-fee model of ‘traditional’ banks,” stated Luvleen Sidhu, Co-Founder, President and Chief Strategy Officer at BankMobile. “Upstart’s focus on automating the customer experience combined with their modeling capabilities further our goal of adding breadth to our growing banking products and services available to our customer base.”
Upstart CEO Dave Girouard will be on stage with Marc Butterfield, SVP from First National Bank of Omaha, at 12:00 p.m. on Tuesday, April 9 at LendIt Fintech USA 2019, taking place in San Francisco, California.
Cole Schotz Bankruptcy Co-Head Michael Sirota Named New Jersey Law Journal Trailblazer
Cole Schotz P.C. announces today that Michael Sirota, co-managing shareholder of the firm and co-chair of its national Bankruptcy & Corporate Restructuring Department, has been named a 2020 New Jersey Trailblazer by the New Jersey Law Journal, which recognized him as a “change agent,” innovator and thought leader.
Mr. Sirota was recognized for his groundbreaking work as debtor’s counsel representing Modell’s Sporting Goods in its Chapter 11 proceedings as COVID-19 erupted across the United States. Mr. Sirota and his team turned to the rarely used Section 305(a) of the Bankruptcy Code to suspend the bankruptcy hearings for their client for the duration of the mandatory store closures. His use of 305(a) resulted in several other judges also embracing the concept of pausing bankruptcy proceedings during the pandemic.
The Modell’s representation is just one instance of the Cole Schotz bankruptcy group developing innovative strategies to help a diverse client base across industries such as retail, pharmaceutical, and hospitality, to name a few, in navigating new challenges brought on by the pandemic. Other recent high-profile matters on which the firm is representing the company or creditors’ committee include Chapter 11 cases for Pier 1, Neiman Marcus, True Religion, LVI Holdco, Sur La Table, and J.C. Penney.
“Our clients have faced extraordinary challenges brought on by the COVID-19 pandemic and we’re thankful they have turned to us to help them find creative solutions to accomplish their objectives,” Mr. Sirota said. “Cole Schotz restructuring lawyers are working tirelessly across the country to advocate on behalf of our clients’ interests amid these turbulent times.”
Since the start of 2019, Cole Schotz has represented parties in more than 300 bankruptcy matters in the retail, hospitality, pharmaceutical and life sciences, energy, and many other industries. These include advising on filings involving Purdue Pharma, Novum Pharma, Destination Maternity, Landry’s (purchaser), Hilltop Energy, and many others.
“In 2020, Sur La Table consummated a going concern sale in record time, exited bankruptcy with new owners and is now on solid financial footing due to the expertise, intelligence, and hard work of Michael Sirota and the Cole Schotz team,” said retailer Sur La Table CEO Jason Goldberger. “I have no doubt that our successful exit would not have happened without Cole Schotz.”
Cole Schotz’ Bankruptcy & Corporate Restructuring practice is a distinguished and nationally renowned full-service group that remarkably has 14 lawyers ranked in four states in Chambers USA: America’s Leading Lawyers for Business and is lauded for a track record that boasts unparalleled effectiveness, success and value.
The New Jersey Trailblazers list was launched by the New Jersey Law Journal in 2019 and this year’s feature was included as part of the August 2020 issue. The New Jersey Trailblazers distinction is given to attorneys who have made significant marks on the practice, policy and technological advancement of their practice areas. The profile of Mr. Sirota may be viewed on Page 18 of the digital edition here.
Cannabis Global Signs with Baja United for Nationwide Distribution
Cannabis Global, Inc. (OTC: CBGL) (“Cannabis Global” or the “Company”), a cannabinoid and hemp extract science-forward company developing infusion and delivery technologies, is pleased to announce that the Company has entered into a three-year distribution agreement with Baja United Group (“Baja United”) for nationwide distribution of Hemp You Can Feel™ branded products, including the Company’s new Hemp You Can Feel™ hemp-based alcohol substitute cocktail mixers.
Under the terms of the agreement, Baja United will stock and distribute the Company’s products and represent the brand to retailers, wholesalers, entertainment venues, and online portals.
“Baja United was a natural choice for us,” commented Arman Tabatabaei, CEO of Cannabis Global. “They have done considerable testing on our Hemp You Can Feel™ products and share our enthusiasm that our new hemp-based alcohol substitute mixers hold the potential to create a new category within the beverage sector.”
While Baja United will focus primarily on beverages, it will hold rights to distribute all of the Company’s products during the three-year term of the contract. The Company has also agreed to provide samples to Baja United for initial distribution to its wholesaler and retailer customers.
Jim Riley, founder of Baja United, commented, “We are very impressed with the Hemp You Can Feel alcohol substitute technology and see it as a unique and highly marketable beverage and food technology. At Baja United, we believe there is a vacuum in the marketplace for great tasting and all-natural labeled alternatives to alcohol-based beverages. And we welcome Hemp You Can Feel™ branded products to the Baja United Family.”
Mr. Riley previously held the position of CEO at Intersect Beverage, where he led all distillery operations, distribution partnerships, public relations, sponsorships, and marketing programs. Prior to that, he spent eight years at Ketel One Vodka as Vice President of Public Relations and Events, where he built a strong network through close work with top regional managers and directors.
SpeakEasy Initiates the Seasons Harvest and Extends Warrant Expiry Date
SpeakEasy Cannabis Club Ltd. (CSE: EASY) (Frankfurt: 39H) (the “Company” or “SpeakEasy“) a holder of a federal licence to cultivate, process and sell cannabis under the Cannabis Act, is pleased to announce the initiation of its outdoor harvest on one of the largest single outdoor cannabis crops in Canadian history and an extension on the warrants set to expire September 28, 2020 for an additional 12 month period.
Outdoor Harvest Has Begun
The team has worked diligently and around the clock to achieve this significant milestone. On Monday, September 21st, we began the harvest of our outdoor campus. The conditions this summer have been favorable and as expected, in conjunction with our incredible genetics, we are now harvesting a bumper crop that we couldn’t be happier about. Founder Marc Geen, states, “I am absolutely thrilled to have started the harvest of our outdoor grow, its been a long road and I’m happy to report the quality of the bud has exceeded all my expectations. It’s all hands on deck as we tackle this next challenge here at SpeakEasy and as anticipated, everyone has pulled together making an extremely difficult process seem easy. As always I am so proud of our dedicated group of talented hard working employees, without them we would have nothing but a bunch of good ideas.“ The harvest is expected to continue for the next 3-4 weeks and will yield flower and extract material suitable to make any concentrate the market demands.
On September 28, 2018, the Company issued an aggregate of 3,863,804 units (the “2018 Units”). Each 2018 Unit was comprised of one common share in the capital of the Company (a “Common Share”) and one-half of one Common Share purchase warrant (each whole warrant, a “Warrant”). Each Warrant entitles the holder to acquire an additional Common Share at a price of $1.00 per share until September 28, 2020. In accordance with the policies of the Canadian Securities Exchange (the “CSE”), the Company has extended the expiry date of the Warrants for an additional 12 month period, such that the new expiry date of the Warrants will be September 28, 2021. The CSE granted the Company an exemption from the requirement set forth in Section 7.4.1(d) of CSE Policy 6 that 10 trading days remain prior to the original expiry date when applying to amend the terms of the Warrants.
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