Former Lending Club CEO Renaud Laplanche is launching a new consumer lending startup with $60m in funding.
Named Upgrade, the company aims to combine marketplace lending with tools to help user understand and monitor their credit.
Rather than operating as a peer-to-peer lending marketplace, as Lending Club did initially before becoming dependent on selling loans to Wall Street investors, Upgrade will work directly with financial institutions.
The $60m Series A investment comes in a combination of equity and convertible notes from Apoletto, Credit Ease, FirstMark Capital, Noah Holdings, Ribbit Capital, Sands Capital Ventures, Silicon Valley Bank, Union Square Ventures, Uprising and Vy Capital.
Laplanche was previously CEO at Lending Club before being forced out after failing to disclose a conflict of interest connected to a fund he encouraged Lending Club to buy an interest in, without revealing he was a limited partner in it.
The company was also found to have altered dates on loans that were part of a $22m bundle sold to the bank Jefferies, which Lending Club later repurchased.
Now Jefferies is advising Upgrade on its capital markets strategy and is expected to participate in loan purchases to help establish the company’s securitization program. Loans originated through the platform are issued by WebBank.
Upgrade launched in August and says it will use a blockchain protocol to enhance data integrity as well as other technologies to develop new risk and compliance management systems.
Laplanche commented: “We are excited to introduce innovations that help consumers better understand their credit potential, unlock that potential and obtain more affordable credit.”
Union Square Ventures’ managing partner Fred Wilson said: “We are thrilled to be backing Renaud again, after having worked alongside him at Lending Club for many years.
“We trust his judgement and integrity, and we think he’s assembled a fantastic team at Upgrade.”
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