Hi you all,
I just had a look at the consumer credit numbers from the current FED release. I asked myself If this could give any hint of information on the upcoming results for companies like Upstart. It’s a little tough for me to figure out what this release really means and If this is even relevant in any case - partly because English is not my native language and partly because I normally skip finance companies. So it could be very well possible this is complete nonsense and has no relevance at all. In this case I hope to provide you with a little amusement and would be really happy If someone could explain to me very briefly what it means instead. Also, feel free to delete at any time, I can take it ;). As I found the release, I did what first came to my mind as a simple thinking man and compared the FED-Numbers to Upstart’s revenue growth:
**Total percent change (Nonrevolving credit):**
Q4|20 Q1|21 Q2|21 Q3|21 Q4|21
Annual rate: 3,8% 5,8% 7,2% 3,9% **5,4%**
**Upstart Revenue Growth:**
Q4|20 Q1|21 Q2|21 Q3|21 Q4|21
QoQ: +34% +38% +61% +12% **+??%**
Link: [http://go.usa.gov/xAhvQ](http://go.usa.gov/xAhvQ)
I took the numbers for Nonrevolving credit because of the provided description:
>>Total consumer credit comprises two major types: revolving and nonrevolving. Credit card loans
comprise most of revolving consumer credit measured in the G.19, but other types, such as
prearranged overdraft plans, are also included. Nonrevolving credit is closed-end credit
extended to consumers that is repaid on a prearranged repayment schedule and may be secured or
unsecured. To borrow additional funds, the consumer must enter into an additional contract
with the lender. Consumer motor vehicle and education loans comprise the majority of nonrevolving
credit, but other loan types, such as boat loans, recreational vehicle loans, and personal loans,
are also included.<<
Of course Upstarts success depends mostly on how well they are executing and not mainly on environmental/macro factors. But unlike our SaaS companies it seems their business is more sensitive to outside factors. Is there a possible correlation or have these FED-Numbers nothing to do with Upstarts business? I couldn’t figure it out any further without hours of researching, so I thought why not just asking the experts (I also searched for the Keywords but couldn’t find anything).
Thanks for any response!