On March 17, 2021, Upstart Holdings, a leading artificial intelligence (AI) lending platform, announced that it has entered into a definitive agreement to acquire Prodigy Software, a provider of cloud-based automotive retail software. With the acquisition, Upstart will accelerate its efforts to offer AI-enabled auto loans through the tens of thousands of auto dealers nationwide where the majority of auto loans are originated. Wilson Sonsini Goodrich & Rosati is advising Upstart in connection with the transaction, which is expected to close in the second quarter of calendar year 2021, subject to customary closing conditions.
“While Amazon and Shopify have modernized the online shopping experience, the auto industry has been left behind. Upstart is on a path to reduce the cost of auto financing, and we can accelerate this opportunity with a modern multi-channel purchase experience,” said Dave Girouard, co-founder and CEO of Upstart. “Auto retail is among the largest buy-now-pay-later opportunities, and together with Prodigy, we aim to help dealers create a seamless and inclusive experience worthy of 2021.”
Since 2014, more than $9 billion in personal loans have been originated by Upstart’s bank partners. Incorporating over 1,000 variables and trained on more than 10.5 million repayment events, Upstart’s AI-powered lending model can provide banks with up to 75 percent fewer defaults at the same approval rate. In September 2020, the first AI-enabled auto loan was originated on Upstart’s platform. In this initial phase, Upstart is enabling consumers to refinance expensive and mispriced auto loans, saving borrowers an average of $72 per month. Following the initial launch, Upstart continues to roll this program out in states across the country.
The Wilson Sonsini team advising Upstart in the transaction includes:
M&A
Rich Mullen
Ryan Cooper
Corporate
Jeff Saper
Allison Spinner
Lester Ang
Technology Transactions
Adam Shevell
Privacy and Cybersecurity
Matt Staples
Daniel Chen
Michael O’Brien
Employee Benefits and Compensation
Dave Thomas
Michael Klippert
Jason Chan
Employment Law
Matt Gorman
Neil Gulyako
Real Estate
Susan Reinstra
Anticorruption and Export Controls
Seth Cowell
For more information, please see Upstart’s press release.