Buy-now-pay-later travel solution Uplift acquired for $100M

Uplift, provider of buy-now-pay-later (BNPL) solutions used by more than 300 airlines, cruise lines and hotel chains in the United States and Canada, has new ownership.

Upgrade, which offers banking, credit and payment products directly to consumers, has acquired the company for $100 million in cash and stock. 

Uplift founder and CEO Brian Barth will continue to lead Uplift’s strategy, reporting to Upgrade CEO Renaud Laplanche.

“I am very excited about the combination of strengths as we double down on using flexible payments to improve marketing metrics,” Barth said in an email.

Uplift’s more than 150 employees – including chief commercial officer Tom Botts – will also make the move to Upgrade, although Botts said it has not been determined if the Uplift name will remain.

Barth and co-founder Stu Kelly launched Uplift in 2013 to make travel more accessible to consumers by allowing them to defer the cost of a booking by splitting it over several months, including options for 0% financing.

For supplier partners, such as United and Lufthansa airlines, Wyndham Hotels & Resorts and Carnival and Norwegian cruise lines, Uplift says its flexible payment options boost conversions, booking value and ancillary sales.

“We’ve been building this business for a long time, and we continue to see opportunities where we can expand our reach beyond just a financing tool and really making this into a marketing tool for partners,” Botts said.

“And part of that requires new financial products as well as additional capital to support those partners. And the great thing about Upgrade is they have both – they have wonderful financial products that we can offer to partners … as well as access to far greater capital, because we have to borrow capital to lend it to consumers. Their size and scale just makes that a vastly more efficient operation.”

Upgrade is a digital-only financial services company based in San Francisco. The company said the acquisition is a good fit because the two brands have similar customers – with an average age of 40 and higher-than-average income - and Uplift’s products are linked to some of the largest travel brands in the U.S. and Canada, which “would take us years to replicate … even if we could.”

Given Upgrade’s fast trajectory – it launched in 2017 and claims to date it has made more than $24 billion in credit available to consumers through cards and loans – it’s not surprising that the company also sees potential to use Uplift’s capabilities in new ways.

Said an Upgrade spokesperson, “We want to bring Uplift’s BNPL to satisfy other needs of our customers beyond travel. We’re already providing financing at the point of sale for home improvements and auto purchases. Uplift will help us continue to expand into other products and services.”

Risks and rewards

Uplift’s payment products went live in 2017, but interest accelerated early in the pandemic – at a time when many other providers of BNPL saw similar growth.

According to a March 2023 report from the U.S. Consumer Financial Protection Bureau, BNPL began gaining ground in the U.S. in 2019, but between 2019 and 2021 the number of BNPL loans originated by five lenders – Affirm, Klarna, Afterpay, PayPal and Zip - increased more than tenfold, from 16.8 million to 180 million.

We want to bring Uplift’s BNPL to satisfy other needs of our customers beyond travel. We’re already providing financing at the point of sale for home improvements and auto purchases. Uplift will help us continue to expand into other products and services.”

Upgrade spokesperson

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But this new take on the age-old concept of layaway has also come under fire.

The bureau began investigating BNPL in December 2021 due to concerns that it causes consumers to spend more than anticipated and accumulate too much debt. In the conclusion of its March report, the bureau noted that “markers of distress” for many BNPL borrowers – such as being highly indebted and having loan delinquencies – were apparent even before the surge in BNPL’s usage in 2019. 

“An important question for future research is whether BNPL improves the financial health of consumers in distress or exacerbates these differences,” the report states. 

Meanwhile in the last couple of years, a different twist has also emerged: Instead of credit, save now, buy later companies such as Accrue offer savings accounts with connections to brands that provide incentives to users to save toward a specific purchase.

The value of travel

Unlike many of the other BNPL providers, Uplift specializes in travel and notes in its mission that it wants to help people “pay for the things that matter most, the ones that elevate people’s lives.” At the same time, Botts said, it recognizes the need for it to be a responsible lender.

“Uplift does a credit check on every single loan we issue to make sure we are not overextending credit to consumers - that’s in contrast to others that are not pulling credit reports or may not report to credit agencies,” he said.

And while interest in BNPL options for travel may be down compared with pandemic highs - intelligence provided by Outpayce from Amadeus shows the number of consumers interested in using this type of financing dropped from 75% in 2022 to 33% this year – Botts said Uplift is still seeing “double digit growth” and adding new partners.

Along with helping Upgrade expand its portfolio of deferred payment options, Botts said he looks forward to developing new solutions to serve travelers and suppliers.

“We see an opportunity in the future with an open-ended loan where a consumer could book that $800 cruise, but as they approach their cruising date could also put a beverage package, for example, onto that same loan or shore excursions or whatever,” he said.

“And the same thing is true in the airline industry, where you have endless ancillaries and add-ons that come in different times of the purchase ribbon. So being able to take a $300 loan for a ticket to Phoenix and then add bag fees … or an upgrade or whatever, that’s interesting.”

Uplift’s last financing came in January 2021 in the form of a $68 million credit line. In total, the company had raised about $695 million in equity and debt.