1. Upstart (UPST) — A Hiring Spree, Product Launch & CEO Interview
a. Hiring Spree
Upstart plans to hire 508 additional workers in its Columbus headquarters through the remainder of the year making it larger than the company’s (previously-largest) Silicon Valley office. As of the beginning of this year, the company had just 554 full-time employees pointing to the significant scale of this decision. The hiring will be directed to operations and engineering roles and has already begun. Columbus is expected to award Upstart with a $3.6 million tax credit for all of the new jobs.
The announcement continues an annual trend of rapid headcount growth for the company with 257 people hired in Columbus in 2018 and 250 more hired in 2020. This depicts direct evidence of leadership envisioning a long growth runway.
b. Product Launch
In other Upstart news, the company officially launched Upstart Auto Retail — the resulting product from its Prodigy Software acquisition. The product merges the slick user car-buying experience featured by Prodigy’s software with Upstart’s AI-powered loan algorithm.
Upstart had already been offering superior car-buying software and this merely upgrades that product while incorporating its financing know-how to maximize consumer utility. With this new product launch, buyers will be able to enjoy a digital or in-store Upstart experience from shopping to purchasing.
There are already signs of Upstart finding success in the auto-world even before this financing integration: The company announced a tripling of its car dealership footprint 2020 as of the product launch. This compares to a “doubling” of the footprint just 2 months ago which illustrates ongoing adoption momentum.
Upstart estimates its total addressable market (TAM) in personal loan origination to be $84 billion — the addition of auto loan originations multiples that addressable market by roughly 7.5X. With less than 1% of car buyers happy with the buying process, there is a large void of consumer satisfaction and access for Upstart to fill. I think it’s in the perfect position to do so.
c. CEO Interview
Patrick O’Shaughnessy interviewed Upstart co-founder and CEO Dave Girouard. The conversation was fascinating and the highlights are below:
Girouard on the company’s focus and optionality:
“Our mission is to build models that are learning as quickly as possible and always improving. Then we can take sidesteps to learn new tricks where suddenly almost any type of lending in the world -- and potentially domains beyond lending -- we have significant advantages in… we’re in a couple sectors today and we’re going to expand to some more. We are building a company with ambitions to plant flags everywhere.”
Girouard clearly stated that lending would be the main focus of the company going forward. It’s important to keep in mind that lending is an extremely broad segment with multiple verticals for seamless expansion. He hinted at mortgages, different types of unsecured loans and even insurance as being on the table but followed that up by stating he has no interest in building a super app.
Girouard on crypto:
“The attraction to crypto in the world is so strong that we do feel like it can be a liability that we’re not a crypto company today. We are crypto believers and we will look and understand things more over time.”
Click here for access to the full interview.
Click here for my broad overview of Upstart’s business and here for my overview of Upstart’s main risks.
2. CrowdStrike (CRWD) — A New Partner and a Telling Chart
a. A new Partner
CrowdStrike is partnering with UiPath and its 9,100 customers to enhance the security of UiPath’s Robotic Process Automation (RPA) platform. UiPath’s RPA niche enables the automation of mundane work-flow tasks to enhance productivity -- this naturally includes a large cohort of end-points and workflows for CrowdStrike to protect.
UiPath’s work-flow transformation requires better security solutions capable of stopping attacks on the endpoints it serves while scaling with all the future growth UiPath is expecting. That’s what CrowdStrike brings to the table — a seamlessly scalable and effective solution for stopping breaches.
Mergers often highlight revenue and profit synergies. This partnership — conversely — will create efficiency and efficacy synergies by reducing time to uncover and remediate threats. Both customer cohorts will benefit.
The cream of the crop often like to partner with the cream of the crop. Based on CrowdStrike’s relationships with CloudFlare, Zscaler, Okta, UiPath and more it is safe to say that is how CrowdStrike is viewed.
b. A Telling Chart
In other news, the twitter account @Soumyazen shared a Credit Suisse CIO survey on which companies these CIOs expect to see the largest percent decrease in IT spend during 2021.
The results were quite favorable for CrowdStrike and are illustrated below:
3. SoFi Technologies (SOFI) — A Marketing Machine
Across its social media accounts, SoFi has been running a promotion it calls #SoFiMoneyMoves. The marketing tool asks consumers to post their SoFi Money Moves Dance and to download the SoFi app. 50 selected winners will get $1,000 with the overall winner receiving $25,000.