A startup called Flurish Inc., better known as LendUp, has raised $ 14 million in Series A funding to provide an online alternative to traditional payday loans, according to co-founders Sasha Orloff and Jacob Rosenberg.
Google Ventures led the investment in LendUp, joined by Data Collective and QED Investors. The deal is one of many in the financial services lending segment for Google Ventures and Google Inc., which supported OnDeck Capital Inc. and Lending Club Inc., respectively.
San Francisco-based LendUp, with 14 employees, provides short-term dollar loans to borrowers online – typically the type of borrowers banks won’t help. Instead of relying on FICO scores, LendUp uses publicly available data online – from social media, for example – to assess which applicants may be at good risk, even if they have no credit history. in the USA. Loan decisions are usually made within minutes, the company says.
According to the most recent data available from the FDIC, 28.3% of households in the United States are considered unbanked or underbanked, which means they don’t have access or sometimes can’t afford to use secured credit cards or bank loans.
When unbanked and underbanked people need working capital, they can turn to non-bank sources of credit, such as pawn shops and payday lenders, which can put them further into a cycle of debt. with exorbitant fees, interest rates or too short periods before their loans. expire, said Orloff, the company’s chief executive.