Upstart Holdings Inc. (NASDAQ: UPST), a provider of a financial platform, has begun offering car finance services. This is the second-largest market in the US after mortgages, and there is a lot of potential for growth.
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The Upstart Holdings platform offers innovative lending services using artificial intelligence systems. As compared with traditional lending models, sophisticated machine learning models allow the company to identify risks more accurately and approve more loan proposals. Upstart Holdings Inc. (UPST) served over 698,00 customers by the end of 2020. Although most loans are made on Upstart Holdings’ website, the company is increasingly trying to make this available on the sites of its partner banks. Thus, Upstart Holdings Inc. (UPST) functions as an intermediary between consumers and lending institutions. The company itself does not provide loans, which allows it to run an extremely profitable business without having to hold large amounts of capital.
Upstart Holdings Inc. (UPST) hopes to become one of the major players in the car industry soon. As well, the company selected a specific moment to begin. First of all, prices of new cars have skyrocketed due to disruptions in supply chains. Secondly, the lack of new cars has caused used car prices to rise. Ultimately, many consumers were forced to postpone buying a car. In June, the demand for new cars in the United States increased by 18%, which might indicate that supply chains are getting back on track. This means demand and supply could balance out again in the next few quarters.
UPST increased the availability of its refinancing product for vehicles from one state to 33 in the first quarter of 2021, as well as growing its dealer network by 45 percent. Furthermore, the company has acquired Prodigy, a company that provides software for car dealerships that helps them digitize and streamline the sales process. According to Upstart, nearly $800 million in vehicles were sold through Prodigy in the first quarter.
Upstart Holdings Inc. (UPST) traded at $113.09 on Thursday. The stock volume remained 3.46 million shares. The company has a current market of $8.68 billion and its outstanding shares stood at 73.63 million.
