What I find interesting is that they’ve cracked the chicken-and-egg problem in a way: enough lending partners to source loans, and enough institutional buyers to absorb them. That dual network effect is what Upstart still struggles with. The dilution risk is real though, but profitability plus BlackRock/vanguard buying in is not a bad signal. If they can lock in more Tier-1 banks, the optionality on volume growth is huge.
What I find interesting is that they’ve cracked the chicken-and-egg problem in a way: enough lending partners to source loans, and enough institutional buyers to absorb them. That dual network effect is what Upstart still struggles with. The dilution risk is real though, but profitability plus BlackRock/vanguard buying in is not a bad signal. If they can lock in more Tier-1 banks, the optionality on volume growth is huge.
I believe the stock is still cheap. The business model is interesting indeed. Thanks for your feedback :)