Reworking traditional credit models to extend loans to people without years of credit history is a big undertaking, but it doesn’t appear too big a challenge for online lender, Upstart. In the 18 months Upstart has been participating in lending online, it’s generated $240M in originations, averaging 25% month to month growth since inception.
Now, the company is further investing in growth with the appointment of CMO, Mike Osborn. Osborn comes to Upstart from Uber, where he was the Head of Growth Marketing, responsible for all digital and offline marketing, as well as product management of Uber’s adtech and consumer promotions platforms. This is Upstart’s first hire as CMO and it’s a key role impacting the future of the firm. As founder Dave Girouard wrote on a blog today, “Without the ability to attract quality borrowers to a lending platform in a scalable and cost efficient manner, the rest will be for naught.”
Online lending is about assessing creditworthiness and managing risk. The complexity of that job is compounded when you extend credit to people who may not have a lot of credit history, like Upstart does. Instead of peering backwards into a prospective borrower’s experience with debt in an effort to forecast it forward, Upstart uses predictive metrics, like job history and education, to determine creditworthiness. Osborn’s role will encompass all performance and brand marketing for the Upstart lending platform.
It’s kind of an arms race right now in the online lending space where Upstart finds itself. Both marketplace lenders and balance sheet lenders are aggressively spending on borrower acquisition. A recent WSJ article described the old-school direct marketing tactics employed by firms like Lending Club and Propser. Both firms sends tens of millions of pieces of direct mail each month to acquire new borrowers. Upstart’s Osborn will have to use his growth marketing experience to further ramp volumes.
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