What happened

Actions of Upstart (NASDAQ: UPST) skyrocketed 38.1% in September, according to data provided by S&P Global Market Intelligence.

This increase means that the shares of the AI-powered lending platform have increased more than sevenfold to date.

Image source: Getty Images.

And that

Upstart has had an impressive growth streak for the past two years, scaling its business to help banks get more loans. Its proprietary AI-powered lending model helps connect borrowers with banks and increases access to credit for a wide swath of consumers. By the second quarter of fiscal 2021, the number of approved loans reached 287,000, up from 41,000 two years ago. The conversion rate, measured as the number of loans processed as a proportion of inquiries received, peaked at 24% compared to 11% eight quarters ago. Transaction volume has also increased fivefold from $ 486 million to $ 2.8 billion during the same period.

This increased activity has done wonders for Upstart’s financial figures. For the quarter, the company reported a 14-fold increase in revenue to $ 187.3 million while reporting net income of $ 37.3 million, reversing a loss of $ 6.2 million incurred in the same period last year. Free and operating cash flow has also turned positive during the first six months of the year.

Now what

The company remains bullish for the remainder of 2021 and projects that revenue could reach around $ 750 million, more than triple the $ 228.6 million earned last year. Recently, he joined the Water and Power Community Credit Union as a partner to provide greater access to loans for his clients. WSFS Bank (NASDAQ: WSFS) It has also launched its own digital personal loan platform powered by Upstart to allow its clients easier access to credit products.

Currently, 71% of Upstart loans are fully automated, up from 29% four years ago, demonstrating how easily clients can get their loans approved. The company has significant room to grow with a total addressable market of $ 84 billion in the personal loan origination sector.

Recently, Upstart also expanded its auto refinance business from 33 states to 47 states, covering 95% of the US population. This line of business is gaining ground with the company increasing its dealer presence and also signing up five bank partners. for auto loans. If this venture is successful, it will significantly increase Upstart’s total addressable market to $ 635 billion, more than seven times its original opportunity.

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