As part of the investment, the company will spin off its credit card business, Mission Lane, as a separate, stand-alone entity. The transition will enable LendUp to focus on personal loans, gamified financial education, and savings. The company’s credit card business – as well as its IP, technology platform, and staff – will comprise Mission Lane. Vijesh Iyer, LendUp COO, will serve as interim CEO of the new company.
“While most of the financial services industry is aimed at the prime and near-prime end of the credit spectrum, these moves set not just one, but two companies up for long-term success,” explained Frank Rotmann, QED Investors co-founder. “Now LendUp and Mission Lane are better positioned to serve the more than half of Americans who lack access to high quality financial services.”
The amount of the funding was undisclosed. Prior to this latest capital infusion, the company had raised more than $361 million.
In addition to its investment news, LendUp announced a new CEO, Anu Shultes. A 25-year veteran of subprime credit and financial services industry and formerly LendUp’s GM, Shultes helped drive the company’s loan originations to more than 5.5 million short-term loans adding up to $1.7 billion.
“We’re on track to profitably expand into new consumer segments and geographies, launch new loan products, double new customer originations, and carry on our mission to help anyone get on a path to better financial health,” Shultes said in a statement. Former CEO and LendUp co-founder Sasha Orloff will remain with the company as a board member and advisor to Mission Lane.
Founded in 2011, LendUp demonstrated its platform at FinovateSpring 2014. A graduate of the Y Combinator accelerator program, LendUp was featured in the Wall Street Journal last August in a look at how fintechs were entering the subprime lending space. In June, the company was profiled by Center for Financial Services Innovation (CFSI) as one of its Financial Health Leaders for 2018 along with fellow Finovate alums like Finicity and Moven.