The suit-and-tie brigade’s equivalent of a sparkly, one-horned stuffed animal is, in venture capital terms, a startup company valued at over $1 billion. It’s not quite as rare as the mythical equine beast, but it’s scarce enough to be exceptional. And Renaud Laplanche just happens to have saddled up and is riding his unicorn fintech enterprise Upgrade into the sunset.
The fintech consumer credit company is guided by the goal of providing responsible financial products to its 2.5 million customers. As CEO, Laplanche is driving a massive change in the financial industry by harnessing the potential of technology.
During an appearance on the podcast “Fintech One-On-One With Peter Renton,” Laplanche modestly explained, “Luck is a big part of it. I mean, fintech became very popular with investors, part of that was our doing, but a lot of it wasn’t, so it was just … a lot of companies got to scale over the last five years.”
But if it were just luck, more companies would cash winning tickets in the unicorn lottery. CB Insights reports that as of spring 2023, there are only around 1,200 unicorn companies in the entire world. And according to Investopedia, “Unicorns are very rare and require innovation. Because of their sheer size, unicorn investors tend to be private investors or venture capitalists, which means they are out of the reach of retail investors.”
Renaud Laplanche: ‘Upgrade Is the Only Credit Card That’s Good for You’
Laplanche is well regarded in both the financial and technology industries, setting him up for fintech success. He’s known for creating innovative products designed to lower costs for consumers and improve user experience. These products have become the benchmark for other fintech companies.
He’s exceptionally proud of the Upgrade Card — as well he should be. With a chuckle, he told Renton, “We believe the Upgrade card is the only credit card that’s good for you. It’s a credit card that gives you access to credit when you need it at the point of sale, as it has that flexibility and convenience of credit cards, but it also comes with lower rates, no fees, and really the discipline of paying down your balance every month at a fixed rate or fixed monthly payment so the same discipline as a personal loan that’s embedded into a card.”
In 2021 and 2022, Nilson Report named Upgrade Card the fastest-growing card in the U.S., making Upgrade Inc. the only card-issuing fintech company on the list. The company has loaned $18 billion in affordable and responsible credit in only five years.
Renaud Laplanche: The Backstory
Laplanche, who has an MBA from HEC Paris and the London Business School and a law degree from Montpellier University in France, started his climb working for a law firm in New York. Spending the first decade of his career in the financial capital of the world ingrained in him the economics acumen necessary to succeed as a fintech entrepreneur. However, it wasn’t until he joined forces with Franck Nazikian that he was truly exposed to the tech world.
The two founded TripleHop Technologies in 2003. The company had its office in the North Tower of the World Trade Center, which was destroyed in the 9/11 attacks. Despite this massive loss, the company persevered and was acquired by Oracle Technologies in 2005.
The acquisition of TripleHop took Laplanche to sunny California, where he started working as Oracle’s head of product management, search technologies. In this role, he managed integration and oversaw sales of the company’s search engine products. After working for Oracle for a little over a year, Laplanche had his next aha moment.
Inspired largely by the high-interest rate on his credit card and the low gains from his so-called “high-yield” deposits, he set out to create a product that would put more money into the pockets of customers rather than line the pockets of self-serving large banks, notorious for confusing charges.
The result was a direct consumer-to-lender marketplace called the Lending Club. With $12 million in funding from venture capitalists, his company soon became one of the leading lending marketplaces in the U.S. In 2014, he successfully led the company to its initial public offering.
Upgrade the Unicorn
On the lookout for a new frontier, in 2016, Laplanche founded Upgrade Inc. This time he didn’t limit himself to consumer credit, but expanded the scope of his company to provide his customers with mobile banking services.
His strategy worked. He told Renton, “At the end of the day, what investors like is soft growth and profitability. A lot of these companies aren’t profitable. Upgrade is profitable. Upgrade has the benefit of doing both.”
As a well-regarded figure in the fintech industry, he raised $122 million initially from various investors. By late 2021, the company had already raised $280 million in funding and was valued at over $6.8 billion. The Series F funding was led by Coatue Management and DST Global.
What makes Upgrade unique is how Laplanche has bolstered his company’s altruistic desires with financial insight gleaned from years of experience. While the company’s focus is providing affordable consumer credit and helping people pay off debt, it does that without compromising financial stability.
Upgrade Inc. works with more than 200 banks, which has helped the company diversify its risk. By principally working with small and regional banks, Upgrade is also helping these banks survive the banking crisis, as the company acts as an intermediary for deposit-starved banks and its national base of customers.
Laplanche’s new company has cemented his status as a pioneer of the fintech industry. His commitment to innovation and interdisciplinary approach has provided a solution to one of the biggest issues faced by the financial industry.
“We feel we can make a meaningful difference in people’s lives by giving them the tools they need to make good decisions that will help them move in the right direction with their finances and their life in general,” Laplanche told IdeaMensch. “Combining payment and credit helps bring better context and better tools to purchase decisions.”
