A credit-led neobank that underwrites loans with machine-learning models, sells most of them to banks, credit unions and investors, adds third-party AI (Pagaya decisioning, FairPlay fairness monitoring) through partners, and is now seeking its own industrial bank charter.
How is Upgrade using AI?
Upgrade's AI is mostly in credit: it decides loans with gradient-boosting machine-learning models, monitors them for bias with FairPlay's real-time fairness software, and since June 2026 uses Pagaya's AI decisioning in its Flex Pay travel BNPL product. A virtual assistant, Upgrade Assist, appears in its September 2026 terms. Upgrade has delivered over $53 billion of credit to 8.5 million customers, was valued at $7.3 billion in October 2025, and applied on October 12, 2026 for a Nevada industrial bank charter.
Category
Neobank
Founded
2016
Headquarters
San Francisco, United States
Licence and supervision
Not a bank: loans, credit lines, cards and checking and savings accounts are issued by partner banks Cross River Bank (New Jersey state-chartered, Member FDIC) and Celtic Bank (Utah industrial bank, Member FDIC); Upgrade, Inc. holds state lending licences under NMLS #1548935. On October 12, 2026 it applied to the Nevada Financial Institutions Division and the FDIC to establish Upgrade Bank, a proposed Nevada-chartered industrial loan company.
Scale
Over $53 billion of credit delivered to more than 8.5 million customers since its founding (as of October 12, 2026)
Flagship platform
Upgrade's machine-learning underwriting (with FairPlay fairness monitoring and Upgrade Assist)
AI leadership
Renaud Laplanche · Jeffrey Bogan · Virginia Varela · Thomas Curran · Tom Botts
- Upgrade makes loan decisions using gradient boosting, a machine-learning technique, according to a January 2024 American Banker report; about 250 banks bought its loans at the time, and its personal and auto-refinance loans were made by partner banks.
- In January 2024 Upgrade began using FairPlay's 'fairness-as-a-service' software to back-test and monitor its underwriting models in real time for disparate impact on protected groups; Renaud Laplanche said the continuous service lets Upgrade make adjustments quickly instead of waiting for periodic audits.
- Pagaya's AI-driven credit decisioning was integrated into Flex Pay, Upgrade's buy-now-pay-later product for travel brands, on June 8, 2026, extending a partnership that previously covered personal loans.
- Upgrade's Terms of Use (effective September 2026) cover 'Upgrade Assist and other Upgrade AI assistants', a virtual assistant interface in the online account dashboard governed by separate AI Assistant terms.
- Upgrade raised $165 million in a Series G led by Neuberger in October 2025; CNBC reported a $7.3 billion valuation, annualised revenue above $1 billion since May 2025, three years of positive cash flow and an IPO '12 to 18 months' away.
- On October 12, 2026 Upgrade applied to the Nevada Financial Institutions Division and the FDIC to form Upgrade Bank, an industrial loan company led by former SoFi Bank officer Virginia Varela, to complement its partner banks Cross River Bank and Celtic Bank.
- Laplanche told Forbes Upgrade issued $10 billion of loans in 2025, about 20% of them bought by credit unions.
What is Upgrade's machine-learning underwriting (with FairPlay fairness monitoring and Upgrade Assist)?
Upgrade makes loan decisions using gradient boosting, a machine-learning technique, and since January 2024 has used FairPlay's fairness-testing software to back-test and monitor its models in real time for disparate impact, with plans to extend it to all credit products. In June 2026 Pagaya's AI-driven credit decisioning was added to Flex Pay, Upgrade's travel buy-now-pay-later product. Upgrade's Terms of Use (effective September 2026) describe Upgrade Assist and other 'Upgrade AI Assistant Services', a virtual assistant inside the customer dashboard.[9][10][11][15]
What has Upgrade done on AI, and when?
- Oct 12, 2026
Upgrade applies for a Nevada ILC charter[1][2][3][16]
Upgrade applied to the Nevada Financial Institutions Division and the FDIC to establish Upgrade Bank, a wholly owned industrial loan company with Virginia Varela as CEO; Upgrade said it had delivered over $53 billion of credit to more than 8.5 million customers. Cross River Bank remains the issuer of its personal loans, credit cards, home-improvement loans and checking and savings accounts.
- Aug 10, 2026
OneCard Essentials announced[14]
Upgrade announced OneCard Essentials, combining pay now, pay in 4 and pay over time on one card with 3% cash back on everyday essentials, available by invitation with broader availability planned through the end of 2026.
- Jul 20, 2026
- Jun 8, 2026
Pagaya AI decisioning added to Flex Pay[11]
Pagaya extended its multi-year personal-loan partnership with Upgrade to Flex Pay, starting with travel merchants, using Pagaya's real-time underwriting to extend Flex Pay financing to more customers.
- Feb 17, 2026
Laplanche on AI-built financial products[7]
In a Fortune interview Laplanche said he is focused on the impact of AI beyond back-office efficiency, asking how AI can produce better financial products for consumers; Fortune cited personalised AI agents among the tools he described.
- Jan 21, 2026
Credit unions bought about 20% of 2025 loans[8]
Laplanche told Forbes Upgrade issued $10 billion of loans in 2025 and that about 20% were bought by credit unions, which he said have lower investment-return thresholds than banks.
- Oct 16, 2025
$165 million Series G at $7.3 billion[4][5][6]
Neuberger led the round with LuminArx, DST Global and Ribbit Capital; Upgrade reported over $42 billion of credit to 7.5 million customers and $750 million of equity raised since inception, and Laplanche told CNBC annualised revenue passed $1 billion in May.
- Jan 25, 2024
FairPlay fairness monitoring for ML underwriting[9][10]
American Banker reported that Upgrade, which decides loans with gradient-boosting models, would use FairPlay to back-test and monitor its models in real time for bias; FairPlay's January 29 release said Upgrade plans to apply it to its underwriting across credit products.
- Jul 27, 2023
- Apr 28, 2023
Partner Cross River Bank under FDIC fair-lending order[22]
The FDIC made public a March 8, 2023 consent order finding that Cross River Bank, Upgrade's main issuing bank, had engaged in unsafe or unsound practices related to fair-lending laws; the bank must obtain FDIC approval for new third-party partnerships or credit products and said existing fintech partnerships were not limited.
- Nov 16, 2021
$280 million Series F at $6 billion[18]
Coatue Management and DST Global led a Series F at a $6 billion pre-money valuation; Upgrade said Nilson Report had ranked Upgrade Card the fastest-growing credit card in America.
- Jan 14, 2021
Rewards Checking launches[17]
Upgrade, then describing itself as a neobank, launched a no-fee mobile checking account paying 2% cash back on common everyday expenses, a year after launching its flagship Upgrade Card; over 1 million consumers were applying for an Upgrade Card or loan each month.
- Sep 28, 2018
SEC settles with Laplanche over LendingClub fund conduct[21]
The SEC charged LendingClub Asset Management and its former president Renaud Laplanche with improperly using fund money to benefit LendingClub and adjusting fund returns; Laplanche, who did not admit or deny the findings, paid a $200,000 penalty and accepted a securities-industry bar with the right to reapply after three years.
Where does Upgrade use AI today?
| System | What it does | Status | Use case |
|---|---|---|---|
| Gradient-boosting loan decisions[9][8] | Upgrade makes loan decisions with a gradient-boosting machine-learning model; loans are originated by partner banks and largely sold to about 250 bank buyers (2024) and to credit unions. | In production | Credit scoring & underwriting |
| Real-time fairness monitoring with FairPlay[9][10] | FairPlay's APIs back-test and continuously monitor Upgrade's models for disparate impact on protected groups; Upgrade said it plans to extend the service to all credit products. | In production | Fair lending & discrimination |
| Pagaya AI credit decisioning in Flex Pay[11] | Pagaya's AI-driven, real-time underwriting extends Flex Pay financing to more customers at travel merchants, building on Pagaya's earlier personal-loan partnership with Upgrade. | Rolling out | Third-party & vendor AI |
| Upgrade Assist[15] | A virtual assistant interface in the Upgrade online account dashboard that provides information and support on customers' accounts, governed by separate Upgrade AI Assistant terms. | In production | Customer-facing chatbots |
| Embedded lending for OnePay[12][13] | Upgrade's lending infrastructure prices and services personal loans inside the OnePay app, using information customers have already shared with OnePay to shorten the application. | In production | Credit scoring & underwriting |
| AI-designed consumer products[7] | Laplanche told Fortune in February 2026 that his AI focus goes beyond back-office efficiency to using AI to create better financial products, including personalised AI agents. | Announced | Generative & agentic AI |
Use-case links open the tracker's rules-by-use-case matrix: which documents govern each system type.
What has Upgrade disclosed in numbers?
| Metric | Value | As of |
|---|---|---|
| Credit delivered / customers since founding | over $53 billion to more than 8.5 million customers[1] | Oct 12, 2026 |
| Valuation (Series G) | $7.3 billion; $165 million raised, $750 million of equity since inception[5][4] | Oct 16, 2025 |
| Annualised revenue | passed $1 billion in May 2025[5] | May 31, 2025 |
| Loans issued in 2025 | $10 billion, about 20% bought by credit unions[8] | Dec 31, 2025 |
| Banks buying Upgrade's loans | about 250[9] | Jan 25, 2024 |
| Credit delivered / customers (Series G) | over $42 billion to over 7.5 million customers[4] | Oct 16, 2025 |
“What [the partnership with FairPlay] is accomplishing for us is making sure we are fair and compliant and making appropriate credit decisions that don't have a disparate impact on any protected category”[9]
Renaud Laplanche · Co-founder and CEO, Upgrade (to American Banker) · Jan 25, 2024
“We've been cash flow positive over the past three years, so we didn't have to do a new round”[5]
Renaud Laplanche · Co-founder and CEO, Upgrade (to CNBC) · Oct 16, 2025
“How do you use AI to come up with better financial products that really move the needle for consumers?”[7]
Renaud Laplanche · Co-founder and CEO, Upgrade (to Fortune) · Feb 17, 2026
“We are excited at the prospect of establishing a new bank that will advance Upgrade’s mission of bringing responsible and affordable credit to consumers”[1]
Virginia Varela · CEO of proposed Upgrade Bank · Oct 12, 2026
Who runs AI at Upgrade?
Renaud Laplanche
Co-founder and Chief Executive Officer (founder and former CEO of LendingClub)[5][4]
Jeffrey Bogan
Co-founder and Chief Financial Officer; proposed director of Upgrade Bank[1]
Virginia Varela
Head of Banking Strategy; named CEO of proposed Upgrade Bank (formerly an officer at SoFi Bank and CEO of Golden Pacific Bank)[1][2]
Thomas Curran
Chief Risk and Compliance Officer (led the 2024 FairPlay fairness-monitoring deployment)[10]
Tom Botts
President of Flex Pay (Pagaya AI decisioning integration)[11]
Which regulators govern Upgrade's AI?
| Authority | Why it matters here | Documents |
|---|---|---|
| State lending regulators (NMLS #1548935) | Upgrade, Inc. (NMLS #1548935) holds state licences for its consumer-credit business, while partner banks issue the loans, cards, credit lines and deposit accounts it offers. | |
| FDIC | Upgrade applied on October 12, 2026 for FDIC deposit insurance for Upgrade Bank; its issuing partners Cross River Bank and Celtic Bank are FDIC members, and Cross River entered a 2023 FDIC consent order over fair-lending controls on loans it originates with fintech partners. | |
| Nevada Financial Institutions Division | Reviewing Upgrade's October 12, 2026 application for a Nevada-chartered industrial loan company, Upgrade Bank, which would become Upgrade's own lender alongside its partner banks. | |
| CFPB | Upgrade's machine-learning underwriting of consumer loans and cards falls under the Equal Credit Opportunity Act and Regulation B adverse-action rules, and Upgrade Assist under CFPB expectations for chatbots in consumer finance; Upgrade says its FairPlay monitoring targets disparate impact on protected groups. | ECOA / Regulation B adverse action (15 U.S.C. 1691(d); 12 CFR 1002.9) CFPB Chatbots in Consumer Finance (issue spotlight, 2023) |
| SEC | The SEC's 2018 settled order barred CEO Renaud Laplanche from the securities industry (with the right to reapply after three years) over LendingClub fund conduct; a planned Upgrade IPO would bring SEC registration. |
Linked authorities have a page in the Regulation tracker; the others are named for completeness and not yet tracked.
What does the public record suggest about Upgrade's AI strategy?
Analysis by BankingNewsAI from the sources cited on this page. Observations, not advice.
01
Little public detail on the models behind $53 billion of credit
Upgrade's most specific public description of its underwriting AI is a 2024 American Banker report (gradient boosting, FairPlay monitoring); its releases report credit volumes and customers but not model variables, automation rates or approval lift.
02
Third-party AI arrives through partnerships
Fairness testing (FairPlay, 2024) and Flex Pay credit decisioning (Pagaya, 2026) are vendor or partner models layered onto Upgrade's own, so model-risk oversight extends to outside providers.
03
Fairness monitoring sits next to partner-bank scrutiny
Cross River Bank, which issues most Upgrade products, entered a 2023 FDIC consent order over fair-lending controls on fintech-partner loans; Upgrade adopted continuous fairness monitoring of its models in January 2024.
04
The bank-partner list has narrowed in 2026
Upgrade's October 2025 funding release named Blue Ridge Bank as an issuing partner alongside Cross River Bank and Celtic Bank; its July, August and October 2026 releases name only Cross River Bank and Celtic Bank.
05
An ILC charter would bring the models under a bank supervisor
If Upgrade Bank is approved, Upgrade's underwriting would run inside its own FDIC-insured, Nevada-chartered bank as well as through partner banks and loan buyers.
Does Upgrade use AI to approve loans?
Yes. American Banker reported in January 2024 that Upgrade makes loan decisions with gradient boosting, a machine-learning technique, and monitors those models in real time for bias using FairPlay's fairness software. Since June 2026 Pagaya's AI-driven credit decisioning has also been used in Flex Pay, Upgrade's travel buy-now-pay-later product. Upgrade has delivered over $53 billion of credit to more than 8.5 million customers since its founding.
Is Upgrade a bank?
No. Upgrade, Inc. is a financial technology company; its loans, credit lines, cards and checking and savings accounts are issued by partner banks Cross River Bank and Celtic Bank, both FDIC members. On October 12, 2026 Upgrade applied to the Nevada Financial Institutions Division and the FDIC to create Upgrade Bank, a Nevada-chartered industrial loan company led by Virginia Varela; the applications are under review and may not be approved.
Who are Upgrade's partner banks?
Upgrade's October 2026 releases name Cross River Bank, a New Jersey state-chartered commercial bank, and Celtic Bank, a Utah industrial bank, as the banks that issue its loans and credit lines and provide its banking services, including Rewards Checking. Blue Ridge Bank was also listed in Upgrade's October 2025 funding release but not in its July to October 2026 releases. Upgrade sells many loans on to banks, credit unions and investors.
How much is Upgrade worth and is it going public?
Upgrade raised $165 million in a Neuberger-led Series G in October 2025 that CNBC reported valued it at $7.3 billion, up from a $6 billion pre-money valuation in 2021. Renaud Laplanche told CNBC annualised revenue passed $1 billion in May 2025 and that the company was '12 to 18 months away from an IPO'. Upgrade remains private.
What is Upgrade Assist?
Upgrade Assist is Upgrade's AI virtual assistant. Upgrade's Terms of Use, effective September 2026, describe 'Upgrade Assist and other Upgrade AI assistants or interfaces' as a virtual assistant available in the online account dashboard that provides information and support about a customer's Upgrade account, governed by separate Upgrade AI Assistant terms. Upgrade has not published usage figures for it.
Does Upgrade test its AI for bias?
Yes. Since January 2024 Upgrade has used FairPlay's fairness-as-a-service APIs to back-test and continuously monitor its gradient-boosting underwriting models for disparate impact on protected groups, and said it plans to apply them across all credit products. Laplanche told American Banker the continuous monitoring lets Upgrade adjust quickly instead of waiting weeks or months for periodic audits.
Who regulates Upgrade?
Upgrade holds state lending licences (NMLS #1548935) and is subject to federal consumer-credit laws such as the Equal Credit Opportunity Act; its partner banks Cross River Bank and Celtic Bank are FDIC members. If its October 12, 2026 applications succeed, Upgrade Bank would be a Nevada-chartered industrial loan company supervised by the Nevada Financial Institutions Division and insured by the FDIC.
- Upgrade Submits Applications to Establish an Industrial Loan Company
- Fintech Upgrade applies for ILC charter
- Upgrade is latest fintech to seek ILC charter
- Upgrade Raises $165 Million Equity Investment
- Fintech startup Upgrade valued at $7.3 billion in new funding round
- Upgrade avoided the neobank meltdown—and just raised $165 million en route to an IPO
- Unicorn CEO on the disaster of $1.3 trillion of credit card debt, an all-time high: His fintech wouldn't exist if 'banks had done a better job'
- Why A Fintech Unicorn Is Donating Millions To Start A Credit Union
- The tech Upgrade plans to use to keep AI-based lending fair
- FairPlay Partners With Upgrade in Continued Effort to Ensure Fairness In Lending
- Pagaya Builds on Multi-Year Partnership with Upgrade to Expand Point-of-Sale Loans (Business Wire via Yahoo Finance)
- OnePay Launches Personal Loans Powered by Upgrade, Expanding Access to Larger, More Flexible Financing
- OnePay and Upgrade Team on Personal Loan Program
- Upgrade Launches OneCard to Give Consumers More Control Over Their Finances
- Upgrade Terms of Use (effective September 2026)
- Upgrade Bank Partners
- Upgrade Launches Unique Rewards Checking Account
- Upgrade Raises $280 Million at $6 Billion Valuation
- Upgrade Acquires Uplift for $100 Million in Cash and Stock
- Uplift Rebrands to Flex Pay, Reflecting Growth and Expanded Opportunities
- SEC Charges LendingClub Asset Management and Former Executives With Misleading Investors and Breaching Fiduciary Duty
- FDIC orders Cross River to correct 'unsafe' lending practices
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