1. The Current State and Future of Online LendingBy
Renaud Laplanche

2. The Last 10 Years: A Slow March Into the Mainstream
“Websites are allowing person-to-person loans, cutting out the middleman.”

3. Now Nearing Completion
“I see the growth of online lending and
marketplace lenders as the natural evolution of banking itself.” Noreika said.

4. Why Online Lending Works

5. Online Lending Platforms Operate at Lower Costs
Online Lending Generates 400bps in Operating Costs Reduction vs. Traditional Lenders

6. More Complete Data Set Enhances Underwriting
Bank
account
data
Credit
Score
History
Debt to
Income
Ratio
Traditional Lenders
Credit
Score
History
Online
footprint
Bank
account
data
Debt to
Income
Ratio
Utility
Payments
Online Lending
Location
Data
Free
Cash Flow

7. Delivering Attractive Investor Returns
Source: Wall Street Journal. Data as of 10/6/2017.

8. And Attractive Yield/Maturity Through Securitization

9. Mostly Uncorrelated to Other Asset Classes
Source: Garret/Galland Research

10. Fast Growing Appetite from Borrowers & Investors
87% CAGR

11. The growth of online lending will accelerate in the next 15 months
Prediction #1
The growth of online lending will accelerate
in the next 15 months

12. The Next 15 Months

13. Initial Opportunity is Expanding: CC Balance Rising

14. But Mortgage Debt Is Declining

15. Driving Overall Debt Service Ratio to All-Time Low

16. Enabling Sustained Economic Growth
The current economic expansion is 99-month old. The expansion cycle before last lasted from March 1991 to March 2001, a full 120 months.

17. The Emergence of Online Lending 2.0
Borrowers
Investors
Greater Affordability
& Convenience
Greater Predictability
& Liquidity
User Impact
Lower Operating Costs & Faster Dev Cycle
Better Underwriting Models
Stronger Compliance, Transparency & Data Integrity
Benefit
Modern Architecture / Microservices
Cloud Computing
Big Data
Blockchain
Protocol
Technology

18. An organized secondary market for online
Prediction #2
An organized secondary market for online
loans will emerge in the next 15 months

19. Product Innovation

20. The “Unbundling” of Banking: 1998 through 2015
Banks
Lending
Deposits
Payments
Asset
Management
Personal
Finance
Lending Club
Prosper
OnDeck
Kabbage
PayPal
Stripe
Square
Marqeta
Wealthfront
Betterment
Wealthsimple
WiseBanyan
Credit Karma
Mint
Acorn
Digit

21. The Great “Re-bundling”: 2015 - 2020
Lending
Payments
Asset
Management
Personal
Finance
Deposits

22. Credit Monitoring & Education Empower Consumers

23. Continued re-bundling will give birth to at least one
Prediction #3
Continued re-bundling will give birth to at least one
major consumer product innovation in next 15 months

24. Legal Disclaimer Disclaimer
Some of the statements in this presentation are "forward-looking statements." The words "anticipate," "believe,“ "estimate," "expect," "intend," "may," “outlook,” "plan," "predict," "project," "will," "would" and similar expressions may identify forward-looking statements, although not all forward-looking statements contain these identifying words. Upgrade may not actually achieve the plans, intentions or expectations disclosed in forward-looking statements, and you should not place undue reliance on forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in forward-looking statements. Upgrade does not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Information in this presentation is not an offer to sell securities or the solicitation of an offer to buy securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

25. Thank You