recent UPST data points

Two quick data points, as we try to separate noise from signal on this ambitious journey.

Berkshire Hills Bancorp filing from today:

-UPST originated loans have losses “well below” model expectations, though it’s relatively new
-UPST originated loans expected to grow from 1% to 3% of their loan book by end of 2022…

Downward pivot in 60 day delinquencies of a tranche previously flagged (updated 4/1).



well below" model expectations means what? Is it positive !?

You have to read the whole sentence. Now read this over and over.

“UPST originated loans have losses “well below” model expectations, though it’s relatively new”



this is a good report to read as well.

one interesting item is the % of Grade E loans that is declining. Page 10.

This ratio declining is probably a decision that Upstart’s bank partners are making.

Long Upstart



Yes, it’s positive. They expected more of a loss than they got–so a positive surprise in their model.

Looooong UPST


they got surprised enough To the point where they want to triple the concentration of Upstart loans!

Upstart’s loans must be better than FICO, or else there’s no reason for there bank partners to do this.
This macro-volatility could be a great opportunity for Upstart to prove their worth vs. the FICO score.


Not necessarily Upstart loans but " We estimate that the Bank will have approximately 3% of its year-end 2022 loan book in loans sourced through Upstart and other potential financial technology partners. "

Who would the other financial technology partners be?
Maybe Payaga?

Thanks for posting those links.

I clicked through them, and can’t read the axes on the plots so I don’t know how to interpret the graphs.

Perhaps the Bancorp modeled the expectations using pessimistic models, and were happy that they did not meet those pessimistic results. Unfortunately, I can’t see this from the graphs.

Just the fact that they are increasing their loan book sounds optimistic, but I would like to be able to see the numbers.

Can you help interpret? Thanks!

If you like $UPST you should definitely look into $EJFA, a Spac merging with Pagaya!

  • Originations are 100% automated vs Upstart’s 70%

  • Revenue is 100% Whitelabel vs Upstart approx 15%

  • Except for personal and auto loans they’re also into POS and credit cards

Some more informations:

Pagaya is growing even faster than Upstart, crazy!

I actually looked into payaga maybe a couple months ago and there are some things I didn’t like.

From Payaga’s Spac presentation:

(1) - Very misleading slide-deck about Upstart’s growth rate. On page 28 they label Upstart’s growth as “NM” (not meaningful), despite “…representing a YoY growth rate of 1,604%, which is marked as not meaningful…” (Page 28)

(2) They have a significantly smaller market-share in personal loans than Upstart. They had annual network volume of 500 million in 2021 vs. Upstart having an annualized network volume of 3.44 Billion in 2020. So they won’t have a large data advantage over Upstart, unsecured personal loans are probably one of the more important loan data sets to gather vs. mortgages or auto.

Upstart is moving more slowly into each category, but taking a larger slice of each pie they enter. Sort of Apple-esqe.

"Revenue is 100% Whitelabel vs Upstart approx 15% "

Is this a figure of merit?
Upstart had talked about in one of there earnings calls about how they have to be able to control there own destiny. If payaga relies on 100% white-label, is there growth limited by the growth rate of there partners?

This is the quote: (… )
"…First, Upstart is both a consumer internet brand as well as a cloud software provider, delivering a deeply proprietary and technical product to our bank and credit union partners. This combination is entirely unique, and is central to our competitive position today and in the future. Were it not for the AI models at the core of Upstart, we would have little unique value to offer our bank partners. And were it not for our consumer presence and scale, we would not control our destiny, and our AI models would not be learning as quickly as they are. This combination means we can dramatically strengthen the competitive position of banks that partner with us, while simultaneously helping consumers find the very best credit product available to them. "


Also important to understand I am long Upstart. So I could definitely be wrong on Payaga.

Another company to keep an eye on would be FREED. FREED is " India’s 1st Comprehensive Debt Relief Company. "
FREED could actually be an excellent partnership opportunity for Upstart. Especially given the low FICO score of there borrowers. ( )

One negative to this partnership could be the volume of loans isn’t big enough to make a difference. But this could also be an opportunity, is there any fundamental reason FREED couldn’t originate 10-100x more loans?

FREED’s vs. Upstart 2022-1
A brief summary

                             UPST 2022-1     FREED 2022-2CP 
Transaction Date              4/4/2022          4/5/2022
Number of Loans                65,724            12,640
AVG loan balance               7,664               14,155
WTD average coupon             18.77%            22.90%
WTD Average FICO                654         **576!!**
KBRA base case loss range     14.50-16.50%  **10.23%-12.23%**  

This is the credit spectrum for context:
FREED actually has a large percent of there borrowers below the fair category which could help Upstart extend even further down the credit-spectrum.

Poor	        Fair	     Good	Very good	Excellent
250 to 579   580 to 669   670 to 739    740 to 799       800 to 900 


Is there something I’m not appreciating about FREED, it is remarkable how low of a loss rate they are able to achieve.

Is it just a function of the interest rate being 4% higher?
What would y’all think of Upstart partnering/acquiring FREED?