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Upstart Nearly Doubles on Deal for Software Firm, Revenue Report

Upstart shares nearly doubled as the AI platform agreed to buy a provider of auto-purchase software and posted a revenue bump for its fourth quarter.
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Upstart Holdings  (UPST) - Get Upstart Holdings Inc. Report shares nearly doubled on Thursday after the artificial intelligence lending platform said it agreed to buy Prodigy Software, a provider of cloud-based automotive retail software.

Terms weren't disclosed.

Upstart, San Mateo, Calif., also reported a 38% revenue bump for its fourth quarter. 

Its shares recently traded at $119,31, up 96% from Wednesday's close. They have more than tripled since the company went public in December.

As for the Prodigy purchase, “While Amazon  (AMZN) - Get Amazon.com, Inc. Report and Shopify  (SHOP) - Get Shopify, Inc. Class A Report have modernized the online shopping experience, the auto industry has been left behind,” said Dave Girouard, chief executive of Upstart.

“Upstart is on a path to reduce the cost of auto financing, and we can accelerate this opportunity with a modern multichannel purchase experience.”

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By acquring Prodigy, Upstart will speed its efforts to offer AI-enabled auto loans through the tens of thousands of auto dealers nationwide, where the majority of auto loans are originated, the company said.

More than $2 billion in vehicle sales have been financed by Prodigy, Upstart said. The deal is expected to close in the second quarter.

As for Upstart’s earnings, revenue reached $84.4 million in the fourth quarter from $61.1 million last year.

Net income registered $1 million, or break-even per share, down from $6.1 million, or 6 cents a share, in the year-earlier period.

Upstart soared nearly 50% on its first day of trading Dec. 16, after pricing its IPO at the low end of its projected range. 

The fintech company priced its offering of 9 million shares at $20. Its stock closed that day at $29.47.