The Current State and Future of Online Lending

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1 Online Lending 2.0 The Current State and Future of Online Lending By Renaud Laplanche

2 The Last 10 Years: A Slow March Into the Mainstream Websites are allowing person-toperson 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 Credit History Credit Score Bank account data Debt to Income Ratio Credit Credit History History Credit Credit Score Score Bank Bank Online Online account footprint data data Debt Debt to to Free Income Income Cash Flow Ratio Ratio Utility Utility Payments Location Data Traditional Lenders Online Lending

7 Delivering Attractive Investor Returns 8% Current Fixed Income Yield Comparison 5% 3% 3% 2% 2% 2% 2% 1% Upgrade S&P US IG Barclays US Govt/Credit US 10-year UK 10-year gov bond 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 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 1,000 US Consumer Credit Card Balance Outstanding

14 But Mortgage Debt Is Declining 6.00 Debt Service to Income Ratio: Mortgage vs. Other Consumer Debt Mortgage Consumer

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 User Impact Benefit Technology Lower Operating Costs & Faster Dev Cycle Modern Architecture / Microservices Greater Affordability & Convenience Better Underwriting Models Cloud Computing Greater Predictability & Liquidity Big Data Stronger Compliance, Transparency & Data Integrity Blockchain Protocol

18 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 Payments Deposits 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 : Lending Payments Deposits Asset Management Personal Finance

22 Credit Monitoring & Education Empower Consumers

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

24 Disclaimer Legal 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