Upstart CEO interview with Cramer

Dave Girouard, CEO of Upstart, was interviewed by Jim Cramer on Mad Money yesterday.…

What I liked:

Q (Jim): Is it possible that you do a thousand times more loans than you’re doing now?

A (Dave): For sure. We are in one product (just entering our second) in just one market. We are still at the very early stages. AI-enabled lending is applicable to the whole world of credit. And that’s a vast, many many trillion-dollar opportunity in the future.

(Pavlos here): A thousand times more loans. Just to put things into perspective, in Q2 Upstart did 286,864 loans, totaling $2.80 billion. Multiplied by 1000 gives us $2.8 Trillion. Pretty big number. This shows how much runway there is for Upstart if they keep executing the way they are.

Q (Jim): How many institutions have you won and how many are there left to go to?

A (Dave): There are about 25 banks and credit unions on our platform today compared to 10 back in December so the growth rate is quick and the pipeline is extremely strong. I would be shocked if in a couple of years we don’t have hundreds of banks and credit unions on the platform.

(Pavlos here): If 25 banks and credit unions can bring in $2.80 billion in a quarter, then imagine how much easier it would be once the domino effect starts with 100s of banks and unions using the platform. This could mean a substantial recurring revenue for Upstart too since it would start to make a meaningful impact both on the top and bottom line.


Also…Still, the opportunity for expansion is huge, as the company is in the “very early stages of proving out the concept of artificial-enabled lending,” he said. “In our view, it’s applicable to the whole world of credit and that’s a vast many, many trillions opportunity in the future.”

So much for too much customer concentration. I mean, this stock may actually be cheap here. The TAM is enormous and they’re just getting started.