Upstart Acquires Prodigy Software, a Leading Provider of Automotive Retail Software
SAN MATEO, Calif .– (BUSINESS WIRE) – Upstart Holdings, Inc. (NASDAQ: UPST), a leading artificial intelligence (AI) lending platform, today announced that it has entered into a definitive agreement to acquire Prodigy Software, Inc., a cloud-based automotive retail software provider.
Every year, about $ 1 trillion worth of cars are sold in the United States, and most of them are financed.1 Yet buying a car consistently ranks among the worst consumer experiences, with less than 1% of buyers satisfied with the current process.
“As Amazon and Shopify modernized the online shopping experience, the auto industry has been left behind. Upstart is on track to lower the cost of auto finance, and we can accelerate this opportunity through a modern multi-channel shopping experience, ”said Dave Girouard, Co-Founder and CEO of Upstart. “Automotive retail is among the biggest buy it now, pay later opportunities, and with Prodigy, we aim to help dealerships create a seamless and inclusive experience worthy of 2021.”
Michia Rohrssen, CEO of Prodigy, said: “Our mission has always been to create the best car buying experience in the world, and for the majority of buyers today, that experience includes financing their vehicle. affordable and transparent auto loans to millions of consumers through our dealer network. ”
Since 2014, more than $ 9 billion in personal loans have been granted by Upstart’s banking partners. Incorporating more than 1000 variables2 and trained on over 10.5 million repayment events, Upstart’s AI-powered lending model can provide banks with up to 75% less defaults at the same approval rate.3
In September 2020, the first AI-enabled auto loan was created on the Upstart platform. In this initial phase, Upstart allows consumers to refinance expensive and poorly priced auto loans, saving borrowers on average $ 72 per month. After the initial launch, Upstart continues to roll out this program in states nationwide.
With the acquisition of Prodigy, Upstart will accelerate its efforts to offer AI-enabled auto loans across the tens of thousands of auto dealerships across the country where the majority of auto loans originate.
Prodigy is the first end-to-end selling software that bridges the gap between how dealerships work and the new way people buy cars. Over $ 2 billion in vehicle sales were made by Prodigy at franchised dealerships of major brands such as Toyota, Honda and Ford.
The transaction is expected to close in the second quarter of calendar year 2021, subject to customary closing conditions.
Upstart is a leading AI lending platform that partners with banks to expand access to affordable credit. By leveraging Upstart’s AI platform, Upstart-powered banks can have higher approval rates and lower loss rates, while simultaneously delivering the exceptional digital lending experience that their customers have. require. Over two-thirds of Upstart loans are approved instantly and are fully automated. Upstart was founded by former Googlers in 2012 and is based in San Mateo, California and Columbus, Ohio.
This press release contains forward-looking statements, including, but not limited to, statements regarding our proposed acquisition of Prodigy Software, how the proposed acquisition may assist dealers, the ability of Upstart to offer auto loans that are compatible with AI and when the deal is expected to go through. . You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate”, “estimate”, “expect”, “plan”, “plan”, “plan”, “intend”, “target”, “aim”, ” believe “,” may “,” will “,” should “,” could “,” may have “,” likely “and other words and terms with similar meanings in any discussion of when or what future operational or financial performance or other events. Forward-looking statements give our current expectations and projections regarding plans, objectives, assumptions, risks, future performance and businesses. Neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. The forward-looking statements included in this press release and the related conference call relate only to events as of the date hereof. Upstart assumes no obligation to update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.
All forward-looking statements are subject to risks and uncertainties which may cause actual results to differ materially from what we expected. Further information about factors that may affect our results of operations is described in more detail in our public filings with the Securities and Exchange Commission, copies of which can be obtained by visiting our investor relations website at the next address: www.upstart.com or on the SEC website at www.sec.gov.
1 In 2019, total sales of light vehicle dealers exceeded $ 1.02 trillion according to the National Automobile Dealers Association’s 2019 Annual Financial Profile.
2 Variables refer to all raw variables and some combined variables considered in our AI models.
3 Based on an internal study in which Upstart replicated three banking models using their respective underwriting policies and assessed their hypothetical loss rates and approval rates using Upstart’s candidate base at the end of 2017 .