Skift Take

As with lots of cash and stock deals, the ultimate outcome will depend on Upgrade's eventual exit, and how that turns out. On the face of it, though, this deal looks underwhelming for Uplift.

This is not necessarily a buy now and pay later acquisition — Fintech firm Upgrade agreed to acquire Uplift for $100 million in cash and stock.

Sunnyvale, California-based Uplift is, of course, a buy now pay later firm that it said counts 300 airlines, cruise lines and hotel chains as distributors. They provide their customers with various plans to take out loans through Uplift to vacation now, and worry about the payments later.

Partners include Emirates, United, Southwest, Norwegian Cruise Line, Universal Studios Hollywood, Wyndham Hotels, and many more.

“We are thrilled to welcome Uplift team members, partners and customers to Upgrade,” said Renaud Laplanche, co-founder and CEO at Upgrade in a statement announcing the deal . “The Uplift team has established the company as the leading BNPL provider in the travel industry, and we look forward to combining forces to make travel more accessible and affordable for millions of consumers, and over time implement similar solutions in adjacent parts of our customers’ lives.” 

Upgrade, headquartered in San Francisco, has offered $24 billion in credit through cards and loans to consumers for things such as auto purchases and home improvements since its founding in 2017. It is said to be profitable, and most recently had a $6 billion valuation.

The deal amount of $100 million in cash and stock had to be a disappointing one for Uplift, which raised around $130 million in funding with a Series C led by Madrone Capital Partners, and a smaller round in its early days that Ridge Ventures led.

Not a Good Deal for Uplift, At All

There was at least one erroneous report that Uplift had raised $700 million. However, most of that was debt financing that went to bankroll consumer loans, and much of that the company presumably recouped.

For Uplift, founded by CEO Brian Barth in 2013, the deal could give it access to additional capital and scale, enabling it potentially to offer improved rates. It may also be able to offer some of Upgrade’s lending products to Uplift’s customers.

In 1999, Barth founded travel search engine SideStep, which he sold to Kayak in 2007 for $200 million.

Upgrade and Uplift have not decided what will happen to the two brands.

Virtually all of Uplift’s nearly 200 employees are expected to be retained in the acquisition. Upgrade has some 1,400 employees.

“We believe this combination will accelerate Uplift’s ability to help consumers pay for their trips through simple and affordable monthly installments,” said Tom Botts, chief commercial officer at Uplift. “As part of Upgrade, more resources will be available to better serve our partners and customers to continue to develop simple, surprise-free, and straightforward payment plans to ensure people can pay for the things that matter most, the ones that elevate their lives.”

While Uplift focuses on travel partnerships, its biggest competitor is Affirm, which offers buy now pay later across a variety of verticals. Affirm’s partners in travel include American Airlines, Delta Vacations, CheapOair and Priceline, among others.

Buy Now Pay Later Bubble?

There are some who believe that the buy now pay later sector is reaching a “bubble” stage, with Gen Zers getting wise to and leaving away from taking out loans, particularly when they come with sometimes exorbitant interest rates. The student loan crisis — and awareness about the sometimes-decades-long debt burdens of such borrowing — may feed into any buy now pay later bubble, as well.

CheapOair, which counts Affirm as a partner, recently collaborated with Accrue Savings on offering savings plans to fund vacations as an alternative to buy now pay later.

Meanwhile, Affirm announced Thursday that it has entered into a buy now pay later deal with Cathay Pacific.

Note: This story has been updated to include commentary on the nature of the Upgrade-Uplift deal, the buy now pay later bubble, and a new partnership that Affirm announced.


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Tags: bnpl, fintech, m&a, mergers, uplift

Photo credit: Wyndham Hotels is an Uplift partner. Pictured is the Wyndham Alltra Riviera Nayarit, an all-inclusive. Source: Wyndham.

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