Upstart Marketing Via Social Media Influencers

This is something that I found interesting in regards to UPST. There is a YouTuber that I watch somewhat frequently that discusses older men’s (40-60 year olds) fashion and style (eye roll). Hey, when you have 4 daughters and a wife certain things take on a little more importance. LOL!

Recently I noticed a video he had posted that dealt with personal debt. This is a subject that is largely out of his lane when it comes to his YouTube channel. Shortly into the video he said, “Today’s video is sponsored by…". Can you guess who? That’s right, Upstart.

I found it interesting and encouraging that part of their marketing plan seems to be reaching people through social media influencers that typically have no interest in anything financial. Perhaps some of you were already aware of this, but it was news to me and I keep a pretty sharp eye out for all things Upstart.

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I found it interesting and encouraging that part of their marketing plan seems to be reaching people through social media influencers that typically have no interest in anything financial. Perhaps some of you were already aware of this, but it was news to me and I keep a pretty sharp eye out for all things Upstart.

Yes - Upstart has been trying to target social media/influencers by paying them 1% of each borrower’s total loan.

I had found it pretty efficient versus CK.

See: https://www.upstart.com/fincon
https://www.upstart.com/affiliates

“We don’t limit your payouts, so your earning potential is limitless! We pay a base rate of 1% per funded loan (up to $500!) and offer bonuses and promotions on top of that. This means that if one of your followers visits www.upstart.com and funds a loan, we will pay you 1% of that borrower’s total loan. For example, if one of your followers funds a $25,000 loan, you will earn $250. We also pay volume bonuses, so the more loans you generate, the more you make.”

As Upstart gets about $650-$688 in fee revenue per $10000 loan size (if the loan is via Upstart.com directly), and suppose they pay $100 per $10000 loan size to the influencer, they are paying about 15% of their revenue for marketing in this social media manner. (But if they offer bonuses/promotions on top of that, it certainly eats more of the revenue.)

Now if we look at the recent results, in the first 6 months of 2021, UPST had $303.467 million in net revenues from fees. Borrower acquisitions costs were reported as $117.055 million. That’s 38.6% of revenues going to marketing. I am going to assume the vast majority is towards Credit Karma, which sourced 49% of UPST revenue in the first 6 months of 2021.

Well, how about that!

Paying 15% in borrower acquisition costs to a youtuber is way better than paying 38.6% to a loan aggregator like Credit Karma.

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