US digital bank Upgrade has closed a $105 million series E funding round.
The round, led by Koch Disruptive Technologies (KDT) with participation from new and existing investors including BRV and Ventura Capital, gives Upgrade a pre-money valuation of $3.325 billion.
Upgrade offers products that are designed to give consumers more value and a better experience than those offered by traditional banks. Upgrade Card, the digital bank’s flagship product, promotes responsible credit by turning every balance into a fixed-rate installment plan, and by paying rewards to cardholders as they pay down their balance.
The digital bank has delivered more than $7 billion in affordable credit to consumers through cards and loans since inception in 2017, and is on track to deliver $7 billion in 2021.
Upgrade debuted a rewards checking account earlier this year that offers 2% cashback rewards to consumers on common everyday expenses. The company also entered the bitcoin market in July with a new credit card that pays rewards in the cryptocurrency rather than cash.
‘Rapid innovation in banking’
With the new funding in place and after experiencing “unprecedented” growth and profitability this year, Upgrade intends to further establish Upgrade Card as a mainstream credit card and continue designing new products, according to co-founder and chief executive officer Renaud Laplanche.
Byron Knight, managing director at new investor KDT, an investment arm of Koch Industries, the largest private company in the US, adds: “We are seeing rapid innovation in banking, and believe fintech, and neobanks in particular, will profoundly transform the banking industry to the greater benefit of consumers.”
“Upgrade has proven success in designing products that deliver more value and a better experience to consumers, and we believe they are uniquely suited to be a market leader.”