Kevin JohnsonUpstart is an AI-based lending and online personal finance company headquartered in San Mateo, California. The company was founded in 2012 by Dave Girouard, Anna Counselman, and Paul Gu to deliver an Income Share Agreement (ISA) product to the market.
In 2014, Upstart pivoted from ISA and evolved into a personal loan marketplace. The platform started with 3-year loans and expanded to 5-year loans. In Nov 2020, Upstart’s market cap surged to about $32 billion after its IPO but dipped to less than $2 billion as of Nov 2022.
The lending giant had around 2,000 employees in 2021 but laid off about 140 employees in November 2022. [1]
Upstart connects borrowers with partner lenders, banks, credit unions, and fintech firms. So, it doesn’t provide loans but links consumers to loan providers.
The company developed a prediction model that analyzes traditional criteria and 1,500 non-conventional variables to determine borrowers’ creditworthiness. Applicants with fair credit scores can get personal loan approval almost instantly via Upstart’s AI-based platform.
Upstart raised $50 million in its last Series D funding round in 2019. However, the company faces stiff competition from Finflux, Prosper Marketplace, Turnkey Lender, LendingClub, Sageworks Lending, SoFi, and other players in the personal loan sector. [2]
Here is an in-depth analysis of Upstart’s top 15 competitors and alternatives:
1. Finflux
Year founded: 2010
Headquarter: Bengaluru, India
Finflux is a SaaS-based lending platform that offers app-based lending, data-based credit scoring, dashboards, reporting, and analytics. It helps financial institutions manage loan origination, acquisition, and accounting. In Jul 2022, M2P Fintech agreed on a deal to acquire Finflux. [3]
Like Upstart, Finflux partners with lenders, banks, credit unions, and fintech firms. Both platforms don’t offer loans but connect borrowers to lenders. As of Jul 2022, Finflux has partnered with over 60 global financial institutions, making it one of the top Upstart competitors and alternatives.
2. Prosper Marketplace
Year founded: 2005
Headquarter: San Francisco, California
Prosper was the first peer-to-peer lending platform in the US. It offers personalized solutions to help customers achieve financial well-being. In Nov 2022, Prosper Marketplace closed a new $75 million financing to meet increased consumer demand for its personal loan, credit card, home equity, and investment products. [4]
Like Upstart, Prosper matches potential borrowers with partner investors who fund the loans. Since its founding, Prosper has helped over 1.5 million borrowers.
In Dec 2021, the company launched its credit card product and attracted more than 150,000 customers in less than a year. The platform facilitates over $1 billion of personal loan originations per quarter and is one of the best Upstart alternatives for loan borrowers.
3. TurnKey Lender
Year founded: 2014
Headquarter: Austin, Texas
TurnKey Lender is a business-to-business (B2B) SaaS company that operates an AI-based lending platform. Its solutions and services automate lending and simplify financial decision management.
As of Dec 2022, over 50 million users from around 50 countries relied on TurnKey Lender’s platform to service loans.
Turnkey Lender and Upstart operate in the financial technology sector; however, TurnKey Lender specializes in B2B lending, while Upstart caters to consumers and lenders.
In 2022, TurnKey Lender partnered with VoPay to enhance its digitized process automation. The company also raised $10 million in July 2022 to exploit new opportunities in North America, Europe, and Asia. The fund and partnership can help TurnKey Lender poach some clients from Upstart. [5]
4. LendingClub
Year founded: 2006
Headquarter: San Francisco, California
LendingClub was the first peer-to-peer lender to register its financial services as securities with SEC. The company operates an online marketplace that links borrowers and lenders. In fiscal 2021, LendingClub had around 1,384 employees and $818.6 million in revenue.
LendingClub and Upstart don’t offer loans directly, but they act as middlemen and match investors with potential borrowers. LendingClub users can take unsecured loans from $1,000 to $40,000, but they cannot use personal loans secured via the platform to make investments or pay for purchases and secondary education costs. The main benefit of using LendingClub is its co-borrower option that allows two applicants on a single loan. [6]
5. Sageworks Lending
Year founded: 2000
Headquarter: Austin, Texas
Sageworks Lending is a lending platform that automates loan origination and boarding to help financial institutions book more loans. It is owned by Abrigo, a global leader in financial technologies. In May 2022, Abrigo partnered with Validis to ensure banks and credit unions complete the lending process without leaving the Sageworks Lending platform. [7]
Sageworks Lending and Upstart enable quick and secure access to financial data for lenders. But Sageworks Lending applies scalable processes to help banks and credit unions extract general financial ledger data efficiently.
Unlike Upstart, Sageworks Lending also operates a Loan Decisioning platform that can entice institutions that seek to streamline loan approval, documentation, and analysis. Sageworks Lending is a worthy alternative to Upstart for banks and credit unions.
6. SoFi
Year founded: 2011
Headquarter: San Francisco, California
SoFi is an online personal finance company offering an online bank, auto loan refinancing, credit cards, mortgages, student and personal loans, and investing. Users can access all these products in a single platform via mobile apps and desktop interfaces. In 2021, SoFi added 3.5 million new customers and reported a 63% increase in revenue. [8]
The main competitive advantage for SoFi over Upstart is its comprehensive offering in a single platform. No other competitor can match what SoFi offers.
In 2022, SoFi acquired Golden Pacific Bancorp, allowing the firm to hold investment loans instead of selling them to external investors, reducing its annual percentage rate (APR). With over $1 billion in revenue, SoFi is a formidable Upstart competitor.
7. Calyx PointCentral
Year founded: 2012
Headquarter: San Jose, California
Calyx offers an integrated mortgage platform with Zip point-of-sale (POS), Calyx Point, and Calyx PointCentral. These compliant software solutions simplify mortgage lending for banks, credit unions, and brokerages. In Aug 2022, Calyx added new features to its Zip platform to improve borrower and originator engagement. [9]
Unlike Upstart, Calyx PointCentral only serves mortgage lenders. Users can access online borrower interviews, loan origination systems, and e-signature software in a single platform. All three Calyx solutions work as a unit to streamline the loan application process making Calyx PointCentral the top Upstart competitor in the mortgage lending sector.
8. Zest AI
Year founded: 2009
Headquarter: Los Angeles, California
Zest AI offers AI-driven solutions to democratize underwriting automation and credit decisioning. The company works with innovative lending organizations like Citibank, First National Bank of Omaha, and Truist to modernize their lending business. In Nov 2022, Zest AI raised over $50 million in a new funding round. [10]
Unlike Upstart, Zest AI specializes in automating underwriting with accurate lending insights powered by AI. The company tripled its customer base in 2021 and aimed to double it further in 2022. Since its founding, Zest AI has built over 250 AI-underwriting models making it the best Upstart alternative for underwriting automation.
9. Avant
Year founded: 2012
Headquarter: Chicago, Illinois
Avant is an online lending platform that connects lenders and borrowers with a credit score of 600-700. Like Upstart, Avant is not a direct lender but reviews loan applications and forwards approved applicants to their partner financial institutions.
Avant and Upstart cater to low-income and middle-income borrowers. The benefits of using Avant include quick funding, accessible options, and flexible loans and payments. The firm approves borrowers and deposits the funds in their accounts within two days, and borrowers can manage their loans via a user-friendly mobile app. [11]
10. LoanPro
Year founded: 2014
Headquarter: Farmington, Utah
LoanPro is an API-based SaaS platform for lenders and borrowers. Financial institutions use LoanPro solutions for real-time monitoring, automation, and management of loans. In Jul 2021, LoanPro secured $100 million in investment funding. [12]
LoanPro allows users to integrate its API-based solution with their systems to consolidate all aspects of the loan lifecycle, from approval to repayment. In Sept 2022, LoanPro partnered with Anovaa to expand its consumer loan origination capabilities.
The firm also partnered with MX to deliver enriched financial data using MX’s Data Engine into its loan management platform. These enhancements increase LoanPro’s competitive advantage over Upstart. [13]
11. QuadFi
Year founded: 2018
Headquarter: Toronto, Canada
QuadFi is on a mission to create financial inclusion without borders. The company provides immigrants and young people with access to affordable financial products. In Aug 2022, QuadFi launched its first borderless financial service. [14]
Upstart is renowned for combining traditional and non-traditional variables; however, QuadFi takes it further by leveraging data science and AI models to consolidate alternative data from domestic and international sources.
With QuadFi’s borderless offering, any newcomer to North America can apply and get a personal loan within minutes, regardless of their FICO score. QuadFi is the best alternative to Upstart for migrants and young people.
12. Zoot Enterprises
Year founded: 1990
Headquarter: Bozeman, Montana
Zoot Enterprises offers fintech solutions, including loan origination, decision management, and data acquisition. In Jul 2022, Zoot partnered with DTFS USA. Under this partnership, Zoot will provide DTFS with advanced data-driven leasing and financing technology to support the fast-evolving commercial vehicle industry. [15]
Zoot and Upstart bridge the gap between borrowers and lenders, but Zoot is the only one with a dedicated and flexible platform for detecting and preventing fraud in clients’ loan lifecycles.
Using Zoot’s solutions and services, financial institutions can leverage accurate data in real-time to improve their decision-making, making Zoot a worthy Upstart competitor.
13. Zirtue
Year founded: 2018
Headquarter: Dallas, Texas
Zirtue is a financial services company with the industry’s first relationship-based lending application. Its platform enables financial inclusion by digitizing loans between friends and family.
At its core, Zirtue simplifies loans between trusted acquaintances via a mobile app with an automatic loan repayment process. [16]
Zirtue caters to the entire financial sector, from fintech to B2B and B2C lending, borrowing, social lending, banking, debit card, peer-2-peer, and alternative payment. Using cutting-edge technology, Zirtue has secured and simplified personal loans between friends, family, and trusted colleagues, making it the best alternative to Upstart for relationship-based lending.
14. Centrex Software
Year founded: 2015
Headquarter: Costa Mesa, California
Centrex is a software platform that offers a full suite of solutions for the financial sector. Lenders, banks, investors, and fintech firms use Centrex for business lending CRM and loan servicing. In Dec 2021, Centrex introduced a tech-driven relationship-building solution to help business clients retain customers. [17]
Centrex’s relationship-building solution uses a mobile app, portal, and push notifications to enhance engagement between lenders and borrowers. However, the main benefit of using Centrex over SoFi is to access a full-featured suite of financial technologies in a single platform. With a 35% growth in revenue in 2021, Centrex is one of the fastest-growing Upstart competitors.
15. Upgrade
Year founded: 2016
Headquarter: San Francisco, California
Upgrade offers personal loans in the US. The platform caters to consumers with fair credit scores. As of Dec 2022, Upgrade charged 2.9%-8% origination fees. [18]
The main advantage of using Upgrade is its quick funding. Consumers can access personal loans from $1,000 to $50,000 within a day or two. Unlike other Upstart competitors, Upgrade doesn’t dictate how borrowers spend their loans, making it one of the best alternatives to Upstart.
References & more information
- Singh, J. (2022, Nov 1). Upstart lays off 7% of staff amid weakening demand for loans. TechCrunch
- Tarver, J. (2022, Dec 2). Upstart Personal Loans Review: 2022. Forbes
- ET Tech (2022, Jul 6). M2P Fintech acquires Finflux to boost digital lending capabilities. Economic Times India
- Prosper Marketplace (2022, Nov 17). Prosper raises $75 in growth capital. Business Wire
- PYMNTS (2022, Jul 14). Turnkey Lender Raises $10M, Names Board Chair. PYMNTS
- Betterton, R. (2022, Dec 13). LendingClub Personal Loans Review. Bankrate
- Abrigo (2022, May 19). Abrigo Collaborates with Validis to Speed Up Small Business Lending Process. PRNewswire
- Zimmer, E. (2022, Mar 2). SoFi revenue doubled in Q4, with total for the year up 64%. ZDNet
- Calyx (2022, Aug 23). Calyx Software announces new enhancements to its Zip point-of-sale platform. Globe Newswire
- Zest AI (2022, Nov 2). Zest AI Secures Growth Capital from Fintech Investors to Advance Next Generation of AI-Automated Underwriting. PRNewswire
- Lorenzo, G. (2022, Jul 15). Upstart vs. Avant: Side-by-side comparison. IBR Info
- Hindle, P. (2021, Jul 13). LoanPro lands a $100 Series A round led by FTV Capital. Fintech Futures
- LoanPro (2022, Sep 14). LoanPro announces strategic partnership with Anovaa. PRNewswire
- QuadFi Inc. (2022, Aug 2). QuadFi announces the first Borderless financial product for global immigrants to drive financial inclusion. Cision Newswire
- Zoot Enterprises, Inc. (2022, Jul 13). Daimler Truck Financial Services Partners with Zoot Enterprises. PRNewswire
- Zirtue (2021, Aug 19). Zirtue Financial Services: Overview. LinkedIn
- Fintech Editor (2021, Dec 21). Centrex Software Announces New Relationship Building Technology at Broker Fair 2021. De-Banked
- Treece, K. (2022, Dec 2). Upgrade Personal Loans Review. Forbes
- Featured Image by Alexander Mils
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