Upstart, the US-based online lending marketplace backed by e-commerce firm Rakuten, insurance firm Progressive and internet and technology conglomerate Alphabet, has closed its initial public offering at approximately $276m.
The company floated in a $240m offering last week, issuing 9 million shares priced at $20,00 each, with shareholders divesting about 3 million additional shares.
The shares closed at $29.47 on their first day of trading on the Nasdaq Global Select Market, and the underwriters took up the option to buy nearly 1.8 million more. The share price as of the end of yesterday was $41.10, giving Upstart a market capitalisation of nearly $3bn.
Founded in 2012, Upstart runs an online platform that uses artificial intelligence to match lenders with borrowers. It made a net profit of about $5m in the first nine months of 2020 from roughly $147m in revenue.
The offering came after about $160m in funding, with Alphabet unit GV taking participating in a $1.75m seed round in 2012 together with First Round, Kleiner Perkins Caufield & Byers, New Enterprise Associates, Tuesday Capital and Mark Cuban.
Rakuten’s Fintech Fund co-led the company’s $32.5m series D round in 2017 with an undisclosed asset manager, investing alongside existing backers Third Point Ventures, Khosla Ventures and First Round.
Upstart last raised funding in a $50m round in April 2019 that included Progressive’s corporate venturing arm, Progressive Investment Company, along with financial services firm First National Bank of Omaha and Healthcare of Ontario Pension Plan.
The company’s leading shareholders now the underwriters option has been exercised are Third Point Ventures (16.8%), Khosla Ventures (7.2%), Stone Ridge Trust (5.1%), Rakuten (4.6%) and First Round (4%), while GV’s stake stands at 1.1%.
Goldman Sachs, BofA Securities and Citigroup were lead book-running managers for the IPO. Jefferies and Barclays were book-running managers and JMP Securities and Blaylock Van were co-managers.
