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LendUp

LendUp
Company typePrivate
IndustryConsumer finance
Founded2012
Founders
  • Sasha Orloff
  • Jake Rosenberg (CTO)
DefunctJanuary 2022; 2 years ago (January 2022)
HeadquartersSan Francisco, California
Area served
Nationwide
Key people
  • Anu Shultes (CEO)
  • Bill Donnelly (CFO)
  • Vijesh Iyer (COO)
  • Nigel Morris (Board Chair)
ProductsPayday loans, installment loans
Number of employees
c. 250 (Q3, 2018)
SubsidiariesAhead Financials Mission Lane
Websitewww.lendup.com

LendUp was an American online direct lender. It offered payday loans, installment loans, and credit cards to consumers with low credit scores using publicly available data to assess creditworthiness.[1][2] The company referred to its customers as “the emerging middle class.”[3][4] LendUp also issued credit cards in partnership with Tom Steyer's Beneficial State Bank.[5][6]

LendUp was co-founded in 2011 by stepbrothers Sasha Orloff and Jake Rosenberg and incubated at Y Combinator. The company positioned itself as a "socially responsible lender" and claimed to provide access to financial services for "underbanked" Americans in addition to lower cost credit and credit-building opportunities. [7]

LendUp received $325 million in equity and debt financing from PayPal, Kleiner Perkins Caufield & Byers, Google Ventures, Andreessen Horowitz, Alexis Ohanian, Y Combinator and QED Investors, among others.[8] In an article published shortly after the company's launch, Time Magazine wrote that LendUp "says it’s not like other payday lenders. Yet the fees it charges — a little over $30 to borrow $200 for two weeks — are similar to what its competitors charge."[2]

In 2016, LendUp raised $150 million to develop a credit card product in January,[9] then paid $6.3 million in fines for deceptive practices [10] and widespread violations of payday and installment loan laws in September.[11][12][13] In 2020, it was again sued by the Consumer Financial Protection Bureau for violating the Military Lending Act.[14][13][15][16]

In January 2019, LendUp announced Anu Shultes as the new CEO and split its credit card operations into Mission Lane.[17]

In December 2021, as a result of deceptive marketing and fair lending violations, LendUp was fined $100,000 by The U.S. Consumer Financial Protection Bureau. Additionally, the company was required to stop issuing new loans and stop attempts to collect on certain loans. The action was taken to resolve a September 2021 lawsuit that alleged LendUp practiced illegal and deceptive marketing in violation of the 2016 finding.[18] It ceased loan operations in January 2022.[18] On May 8, 2024, the CFPB announced the distribution of nearly $40 million to affected consumers.[19]

As of March 1, 2023, LendUp last filed an annual report in 2020 and purportedly owes $390,332 in taxes.[20]

Ahead Financials

In December 2020, LendUp launched Ahead Financials, which went live the following May. Within a year of launching, Ahead informed customers via email that a "new app was coming".[citation needed]

Ahead was reportedly acquired by Kinly, although customer service hotlines claimed Ahead simply "rebranded its name to Kinly." According to social media, several users were unable to transfer funds or open new accounts. Kinly's sites failed to mention customer transitions and blocked transfers. Additionally, some accounts were closed without notice, blocking access to funds.[21]

Kinly was acquired by Greenwood in May 2023.[22]

References

  1. ^ Kolodny, Lora (2013-11-12). "Google Ventures Backs LendUp to Rethink Payday Loans". Wall Street Journal. ISSN 0099-9660. Retrieved 2021-04-20.
  2. ^ a b White, Martha C. (2012-11-16). "Can a Payday Lending Start-Up Use Facebook to Create a Modern Community Bank?". Time. ISSN 0040-781X. Retrieved 2021-04-20.
  3. ^ "Exclusive: S.F. fintech raises $100 million for subprime lending". www.bizjournals.com. Retrieved 2018-04-22.
  4. ^ Shubber, Kaddim (September 28, 2016). "LendUp: playing with people's lives". Financial Times. Retrieved April 29, 2021.
  5. ^ "LendUp launches a better credit card for people looking to improve their credit". TechCrunch. Yahoo!. 2017-05-16. Retrieved 2021-12-27.
  6. ^ "LENDUP AND BENEFICIAL STATE BANK ANNOUNCE MAJOR EXPANSION OF CREDIT CARD PARTNERSHIP". self-published by LendUp. 2017-05-16.
  7. ^ "Tech's Hot New Market: The Poor". Wired. ISSN 1059-1028. Retrieved 2021-04-21.
  8. ^ Demos, Peter Rudegeair and Telis (2016-08-23). "Silicon Valley Lender Raises Nearly $50 Million for Subprime Credit-Card Push". Wall Street Journal. ISSN 0099-9660. Retrieved 2021-04-21.
  9. ^ Constine, Josh (2016-01-23). "LendUp Scores $150M For A Credit Card That Won't Screw You Over". TechCrunch. Retrieved 2023-07-25.
  10. ^ "Google-funded loan startup to pay $6.3m for 'deceptive' practices". the Guardian. 2016-09-28. Retrieved 2021-04-21.
  11. ^ Peterson, Andrea (September 28, 2016). "Regulators Crack Down on Alphabet-backed Payday Lender". The Washington Post.
  12. ^ Wall Street Journal (September 28, 2016). "Lender ordered to pay total $6.3 million over payday-loan and installment-lending violations".
  13. ^ a b Koren, James Rufus (2016-09-27). "Google-backed LendUp fined by regulators over payday lending practices". Los Angeles Times. Retrieved 2020-07-19.
  14. ^ "LendUp overcharged military borrowers, CFPB says in lawsuit". American Banker. 2020-12-04. Retrieved 2021-04-21.
  15. ^ Mark Calvey (2021-08-18). "LendUp No Longer Offers Installment or Single-Payment Loans". San Francisco Business Times. American City Business Journals. Retrieved 2021-12-27.
  16. ^ "Frequently Asked Questions". LendUp. Self-published. Retrieved 2021-12-27.
  17. ^ Calvey, Mark (January 11, 2019). "LendUp splits in two, names new CEO". www.bizjournals.com. Retrieved 2023-07-25.
  18. ^ a b Johnson, Katanga (2021-12-22). "U.S. consumer bureau orders fintech firm LendUp to halt new loans, pay penalty". Reuters. Retrieved 2022-01-07.
  19. ^ "CFPB to distribute nearly $40 million to consumers misled by fintech company LendUp Loans". May 5, 2024.
  20. ^ "LendUp Global Entity Search Status | PDF". Scribd. Retrieved 2023-08-16.
  21. ^ Mikula, Jason (2022-07-31). "What Happens When A Neobank Goes Bankrupt?". Fintech Business Weekly. Retrieved 2023-07-25.
  22. ^ "Greenwood Acquires Kinly, A Mobile Banking Platform, to Bring Together Two of The Largest Black-Owned Fintechs". www.businesswire.com. 2023-05-02. Retrieved 2023-07-25.
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