Fintech startup Upgrade raises $165M in funding at $7.3B valuation, eyes IPO within 18 months

Fintech startup Upgrade is gearing up for a public debut. The San Francisco-based neobank, known for offering affordable credit through cards and personal loans, has raised $165 million in new funding, pushing its valuation to $7.3 billion—a 21.7% jump from its last round during the 2021 fintech boom.

We first covered Upgrade in 2021 after the fintech unicorn raised $280 million in funding, nearly doubling its valuation to $6.28 billion at the time. Four years later, the company is once again in the spotlight as investors return to consumer finance and fintech IPOs regain momentum.

Upgrade Raises $165M to Prep for IPO Amid Fintech Market Rebound

The new financing, nearly four years after its last external raise, marks a renewed vote of confidence in consumer fintechs after years of investor caution. “We’re probably 12 to 18 months away from an IPO, so we wanted to give the team members some liquidity before IPO,” CEO Renaud Laplanche told Reuters in an interview.

The round was led by investment firm Neuberger, which also buys loans from Upgrade. Neuberger’s Head of Specialty Finance, Peter Sterling, has joined the company’s board of directors. Existing investors DST Global and Ribbit Capital also participated in the round.

Founded in 2016 by Laplanche alongside Adelina Grozdanova, Jeff Bogan, Matt Wierman, Soul Htite, and Visar Nimani, Upgrade has built a reputation for helping everyday consumers access credit without the high costs that often come with it. Since launching in 2017, the company has delivered more than $42 billion in consumer loans across credit cards, buy-now-pay-later programs, and home and auto financing.

Upgrade’s rise mirrors the arc of fintech itself. After a record surge of funding during the pandemic, the sector cooled as interest rates climbed and investors shifted their focus to enterprise AI. But with equity markets rebounding and IPOs making a comeback, fintech firms are stepping back into the spotlight. Recent debuts from Klarna and Chime have added fuel to the optimism.

For Upgrade, the focus now turns to scaling ahead of a public offering. The company continues to expand its digital banking products, offering users credit access and cash-back rewards.

Laplanche said the company is adapting to a new marketing environment as AI reshapes how users find products online. “We switched a lot of focus from traditional search engine optimization to AI search optimization,” he said, hinting at how fintech marketing is evolving in the age of AI-driven search.

As investors return to consumer finance and public markets reopen, Upgrade’s timing could be right on the money. The next 18 months may determine whether one of fintech’s most resilient startups becomes the next household name on Wall Street.