LendUp, a San Francisco-based fintech company that has raised over $300 million from firms like Google Ventures and Y Combinator, is splitting up the company, Axios has learned from multiple sources.
The details: The split was largely borne of feedback LendUp received while trying to raise new funding, with investors not believing that the "financial inclusion" business and card business really worked together, let alone LendUp's larger vision of a full-stack financial services business for the working poor.
One issue was that credit card issuers often require bank partners for scale, and many top-tier banks won't work with a company that also offers loans at payday-level APRs.
As part of the pending split, LendUp also recently had a round of layoffs.
No comment from the company.
What's next: The core payday lending business will remain under the LendUp brand with founding CEO Sasha Orloff at the helm, but the company is in talks to sell off a credit card unit that launched last year. One interested suitor is Philadelphia-based private equity firm LL Funds.
