Alternative payday loans startup LendUp closed USD14 million in a financing round led by Google Ventures. Data Collective and QED Investors also participated in the company's first venture funding round. This was according to a report by VentureBeat.
LendUp is a startup company that grants loans to people with poor credit. It uses modern algorithm to identify people who will most likely repay a loan. The company offers them a maximum annual loan of USD1,000 with about 29% interest and no hidden charges. The goal of LendUp is to help these people get out of debt instead of dragging them down, the report said.
Customers could avail of instantaneous loan decisions from LendUp. This means clients could apply for a loan at any time of the day. Upon repayment of the loan, applicants are moved up the category ladder and unlock loans with lower interest rate, the report explained.
LendUp was founded by Y Combinator graduates Sasha Orloff and his stepbrother Jacob Rosenberg. With the new capital, the company would hire new workers and invest into its marketing and expansion, VentureBeat reported.
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