LendUp, a San Francisco-based lending start-up, announced a seed round of funding led by some pretty big-time investors, including Andreessen Horowitz, Kleiner Perkins, and Google Ventures.
The company's co-founders, Sasha Orloff and Jacob Rosenberg, did not disclose how much funding the company received to Inc.
But, they did say that the money would go towards their debt facility and building a team of employees (the company currently has 9 employees).
"I think we're venture-backed because we want to help as many people as fast as possible," Orloff told Inc. "Our higher goal is this idea of laddering people up, and helping people get to better and safer places."
With small loan amounts and repayment windows, LendUp aims to improve credit scores for clients with poor or no credit. Loans can range anywhere between $100 and $250, and recipients can repay LendUp between seven and 30 days.
Currently, LendUp, which was founded in 2011, said it approves about 15% of loan applications it receives. For the other 85% that aren't approved by LendUp, the company connects them to local non-profit lenders that might be able to help. This will still give would-be clients a chance to build their credit portfolio, the founders said. The first non-profit that they are teaming with is JustinePetersen.org, local credit builder based in St. Louis, MO.
"We want to use them as a shining example of how technology can help make a community better," Orloff told Inc.
While the founders said there are no rollovers or hidden fees in their loans, LendUp will charge a small interest rate--starting at 15% of the loan. The longer recipients wait to pay their loan back, the higher the interest rate becomes. Users can lower their interest rates however, if pay their loans ahead of schedule or take classes on good credit, financial planning, and more, TechCrunch reported.