In the dynamic world of entrepreneurship, few stories are as captivating as Renaud Laplanche’s journey. From the picturesque streets of Paris to navigating the entrepreneurial waters in the South of France, Renaud’s experiences have shaped him into a serial entrepreneur with a remarkable track record.
Renaud’s latest venture, Upgrade, has attracted funding from top-tier investors like Dragoneer Investment Group, CreditEase, FirstMark, Union Square Ventures, and G Squared.
In this episode, you will learn:
- Renaud Laplanche’s journey from Paris to the forefront of fintech exemplifies the evolution of a visionary entrepreneur.
- Renaud’s unique combination of business and law laid the foundation for his ability to navigate diverse industries successfully.
- The shift from a top law firm to founding MatchPoint showcased Renaud’s willingness to leap into entrepreneurship and assemble IKEA furniture in pursuit of his vision.
- Lending Club’s success provided crucial lessons in resilience, financial stability, and the importance of trust in the fintech landscape.
- Renaud’s recognition of the monoline mistake at Lending Club led to Upgrade’s multiproduct platform, offering a comprehensive suite of financial services.
- Building trust with customers is Upgrade’s hallmark, with Renaud emphasizing the importance of being a reliable partner in their financial journey.
- Renaud underscores the significance of assembling a skilled and aligned team, learning from past experiences, and adapting strategies for sustained success in the entrepreneurial realm.
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About Renaud Laplanche:
Renaud Laplanche is a Co-Founder and serves as Chief Executive Officer at Upgrade and a Board Member at RentoMojo.
Renaud is also an Angel Investor. He Founded and served as Chief Executive Officer & Chairman at Lending Club.
Before Lending Club, he founded and served as the Chief Executive Officer of TripleHop Technologies.
Prior to that, Renaud was a Senior Associate at New York law firm Cleary Gottlieb Steen & Hamilton.
Renaud has a Master’s of Business Administration in Finance from London Business School and a JD from Montpellier University.
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Read the Full Transcription of the Interview:
Alejandro Cremades: Already hello everyone and welcome to the deal maker show. So I got to tell you we’ve done over 800 episodes but I got to tell you that this is one that I’m really excited about as the saying goes once you’re lucky twice youre good and in this case, you know like a our founder today has Bill. Not one. But multiple billion dollar companies now he is on his third rocket ship. We’re going to be talking about it. We’re Goingnna be talking about building scaling financing acquisitions taking your company public hiring all the good stuff that we like to hear so brace yourself for a very inspiring episode and without further ado. Let’s welcome our guests today rena lalanche welcome up to the show. So originally born in the beautiful city of Paris but grew up in the south of France give us a walk through memory lane. How was life growing up. So.
Renaud Laplanche: Thank you for having me on.
Renaud Laplanche: I was was fun actually ah growing growing up in the South France was really nice I mean it’s a nice weather. Um, it’s pretty like slow pace life but lots of interesting people and I was into savingating at the time I’m still is to some extent. Um, but yeah, so I was spending a few four days at school four days out on the water was a nice way to grow up.
Alejandro Cremades: And how did you come up with the whole combination of business and law. You know people will typically either go into one or the other direction. But how did that combination come about for you. Okay.
Renaud Laplanche: Yeah, you know, um I always found it very complimentary and I’m not one of these reformed lawyers who was like bored at the law firm and couldn’t wait to get out I actually enjoyed practicing low I think Yeah. Can be I think anything you do in life can be very, Um, so interesting and and and you can be creative even in in you practice low or accounting things that you wouldn’t think of being bringing up your creative Scales I think you can always ways to be. To be innovative and to so go where where nowhere has gone before and and so Chater New newground.
Alejandro Cremades: Yeah, because in this case for you once you got your degree you ended up joining a us law firm called Cleary Godlip that was ultimately your bridge into the us. But there you spent actually close to 5 years So 5 years gives you access to many learnings. Um, many lessons learned. So I guess in your case, what do you think that practicing law and studying law gave you from a frame of reference and perspective that would serve you later on in life.
Renaud Laplanche: Yeah I think um, the practicing law at the top law firm Likelay Gottlib um really gives you a great of overview of a lot of different businesses right? And that’s something you get. Also if you start at an investment firm or concerting company.
Renaud Laplanche: It’s a good way to start your career I find because it really gives you exposure to different industries different businesses, different founders and executives and and give you a sense of what what works and what doesn’t so I think that that’s that’s a positive and then the the practice of law itself as I was saying could be. Be really creative and it’s it’s all about you know you have a problem in front of you and you have a toolbox and it’s all about choosing the right tool and is the right tool is una availableable. It’s about crafting a tool that would help you in that case I found that pretty ah sort rewarding.
Alejandro Cremades: So how did you get your ticket to come to the Us How did that happen.
Renaud Laplanche: Yeah, so so the firm made the decision that they probably regretted in hindsight but they offered me to spend six months to a year at the New York office um, and and the the idea was an ability to really sort of meet movi us based partner and and then come back to to Paris but you know it was Ninety Ninety nine it was a great time to leave a cushy well-paid job at the bank or a.
Renaud Laplanche: A law firm and Andre start a new company and and obviously so lots of lots of things were happening and in there on the internet and and in software at that time. So it was a great great time to to raise money and and and get it going.
Alejandro Cremades: But that’s quite the shift of careers right? now you know like switching from ah the legal side of things and and and pushing paper. You know as lawyers would do in New York especially in New York oh my god I guess how did that team. Idea of giving your notice and and and venturing into the unknown. How did that come up. Yeah.
Renaud Laplanche: Um, yeah, you know I had this idea of a search technology but actually I need it as a as a lawyer I mean there the search capabilities we had internally were really not not great and we were spending and and wasting a lot of time. So. Looking for precedent and correspondence. Um, another time I met someone in New York who was finishing his his ph d and artificial intelligence and information retrieval and so with my business ideas and is is technology. We are. We thought we had something and and we decided to to launch match point which was a sort of Enterprise Search Engine so sort of a Google for inside the firewall so technology that I needed as a user and um. And we we found was was missing in the world.
Alejandro Cremades: And how was that I am adjustment to now becoming an entrepreneur and and and putting fires out.
Renaud Laplanche: Yeah, was with quite a bit of and adjustment. You know, ah as a like fifth year associate in a biglow firm you you get? you have a lot of support staff and you don’t get your your hands dirt much so I went from that to assembling Ikea furniture. In a tiny office right? above a Mcdonald’s and a twenty four seven Mcdonalds so we weremitting burgers every every hour of the night and and then um. And you know with no no report and you do it all yourself and you you’re constantly in the early days I find it actually reallyvalviorating that in the early days I mean you, you’re constantly sort of moving up or down right? Yeah, you’re like doing some like very so. Day-to-day mundane tasks and then you’re thinking about the long-term strategy of the business and then you’re going back to assembling Ikea desk for the for the next employee that’s coming next week so it’s ah it’s a lot of scaling up up and down. But yeah. So. It’s very ah, very formative as ah as a young entrepreneur.
Alejandro Cremades: So also first company first exit. So quite a good hitting rate right there. So so so walk us through how the acquisition with oracle came about make us insiders there for a minute.
Renaud Laplanche: Yeah, we were lucky that at the time both Microsoft and ico were sort investing in search technologies and and Google and and internet search engines were were becoming so sophisticated. And working so well that there was growing frustration for professionals to not have the same experience inside the firework the fire firewall and not being able to sort of seamlessly easily quickly retrieve the information they needed to to do their job. Um, so all the big software companies were investing in search at the time so we we were lucky to have 2 bidders for for the business and orico ended up being the high bid and and we decided to to sell and and it was a pretty pretty easy decision at the time to. Between like setting the business or or keep it going because we could see how there was consolidation and and and a lot of ctos and cios inside large enterprises. Were still hesitant to go with that like small technology company small software company that didn’t have a lot of financial stability where we raised like a couple of rounds but didn’t have a a lot of cash. Um, but the technology was great and and worked really well.
Renaud Laplanche: Um, so it it felt like yeah we would be more successful as part of a larger larger software of powerhouse like like all I call a Microsoft.
Alejandro Cremades: Ah, what kind of visibility would you say that this gave you into the full cycle of a business because here you were able to ah go through every single you know base that you can think of of you know, building scaling and and also exiting so I guess. From a thirty Thousand foot view a kind of disability that did that give you into the cycle of of a company.
Renaud Laplanche: Yeah, it was great I mean in 5 years we went from the id stage to raising money to almost running out of money making making pay with my own paycheck literally a couple of times. Um. To actually our our headquarters were in the world tread center in 2001 so we lost we lost our headquarters and we lost like quite a bit of of a bit of technology and and and some paperwork so having to like rebuild regroup. Fortunately, we didn’t choose any any employees on September Day so but but that that suddenly slow down the business and and and let’s slow down the economy a lot so was was hard for like 9 to twelve months and then recovered from that and. And and really experienced fast growth and and success for for a couple of years and then we ah then we exit and the the negotiations and and so really is the full cycle as you said and and then with of integration from from the standpoint of your query. Um, integration into a large large companies like oh I call had 30000 employees also at the time. Um, so yeah, very very different work environment. It really is of interesting task to relaunch match point as ano I call product.
Renaud Laplanche: Um, and retain the employees and then so transition the the brand and the customer base so that was that was really interesting and to think that it all happened inside of 6 years was really really exciting.
Alejandro Cremades: That’s amazing now after the acquisition you went to oracle and you did the famous besting and resting I’m not sure how much resting was there but they definitely you did it for 1 year and one day so it was like literally on the dot boom. You gave your notice. So so give us, um. Ah, kind of like an insider local perspective into how the idea of your next company came about lending club and how did you go from ideation all the way to incubation and to and to the launch of the business.
Renaud Laplanche: Yeah, so the id again came to me as a as a user so I was in my ah in my living room opening the mail and so the first piece of mail I opened was my credit card statement. Where I was discovered that I was paying sort of 18 % interest rate on my critical balance which I thought was a really high rate. Um, but then the next piece of mail I opened was my savings account statement where my high yield savings account where at the time I was earning like 0.5.
Renaud Laplanche: So thought okay wait a minute that that’s a really big spread if I basically lend money to the bank to give me job point 5 if I borrow from the bank on my credit card I’m going to pay a and with all that money going. Um. But but actually it was the idea of of lending club of creating a marketplace that would essentially shortcut the banks cut out the middleman and and bring on both sides of the marketplace on one side people who need the money on the other side. The people who have the money. And let them give them the tools to enter into credit agreements so into loans and the personal loans so that um like savers investors would earn more than zero point five percent and people borrowing the money would pay less than 18.
Alejandro Cremades: And in this case I would say that laneing club was one of the companies that paved the way for the whole fintech you know revolution right? I mean you guys launched the platform in 2007 So I’m sure that you know now obviously you know like there is a a nice path to follow for all these fintechs that are launching. But I’m sure that really blending in not only the securities or the or the regulatory compliance with perhaps the um also the the the uncertainty of building a company from nothing blending those uncertainties into one I’m sure that was not easy.
Renaud Laplanche: Yeah, know a lot of hurdles and as you said I think we were lucky to pave the way for of consumer fintech. Um, but that means there was a lot of uncertainty at the beginning regulatory uncertainty as you said like we are not sure if there is like fraction of loans. Would be considered securities or not and they we had a lot of discussions with thescc and they said yeah they are securities so we we had to shut down the the platform for six months to register the entire program as ah as essentially a a public offering of securities. Um, and but went for it because we did it voluntarily I think the scc was was helpful in the process and and we were able to do it relatively relatively quickly and have a pretty pretty keen bra and clean, clean, Nonch relaunch um, but there there were like other issues I mean just like the. Um, I think the lack of comfort at the time for transacting online and and particularly entering into financial transactions with who a platform that just had been around for a couple of years and and and wasn’t well known at all. It was clearly a challenge I mean banks banks aren’t great at delivering. Um, great consumer experience or a lot of customer satisfaction but they are really good at establishing trust but people generally don’t love their bank but but they trust it. They.
Renaud Laplanche: They know it’s always going to be there because because it’s been there for some case 400 years um and does have Dsc insurance and and all that when you’re enter into financial transactions with a company that’s been around for 2 years I think now it’s that trust has been built. But at the time it had not so it was really um, even the beginning of ecommerce. So just like this like spot transaction when you’re buying something it. It was fine and entering into a 3 or 5 year term loan with a company that’s been around for 2 years His it’s quite a leap of faith. So we really had to build that that trust over time.
Alejandro Cremades: Now I want to now bring you a little bit back in time that’s going to be December Tenth two thousand and fourteen you guys are ringing the bell and then and basically you know one of the biggest ipos in 2014 what goes through your mind that day.
Renaud Laplanche: Yeah, it was a good day I was certainly a lot of lot of pride as a founder when you do a big ipo like this and we um, we were able to sort of hang a giant sort of landing club logo. On the facade of the New York Stock exchange on the on broad street um, and so’ve had ah a lot of our customers were there. We were able to invite lots of employees everybody wearing via lending top colors and so we had like. 20 employees on the floor of a New York Stock Exchange um and so yeah, all the Tvs where were there was on Cnbc from from the exchange. Um, so yeah, was was a lot of pride and and I think good branding opportunity I mean if you’re running a consumer company. Um, so being being public. It could go I mean could cut buff wins when when the stock doesn’t doesn’t go the right way. But but if if the stock performs reasonably well, it’s a good opportunity to align interest between your like retail shareholders and your customers. Especially in the case of lending club where a lot of the customers. A lot of investors on the retail side of the the platform were also like investors in the loans and investor in the stock. Um, so there’s some some synergies there when when when things go on.
Alejandro Cremades: So at the pick of the valuation. You know it was 10000000000 so really incredible incredible journey ah but obviously you know once an entrepreneur entrepreneur always an entrepreneur and in mayo 2016 it’s time to turn page and then you decide it’s time to launch another rocket ship. So. Walk us through how did this sequence of events you know folded there for you to ah take action and get going with upgrade.
Renaud Laplanche: Yeah I mean first my exit from leninglaver. It was a pretty pretty public disagreement with with the board I mean with some compliance issues and a lot of disagreements as to who was to blame for it and and what to do about it to to fix it. So I left I left the company van but a lot of the us of top team also disagreed with with the way the board handled the situation. So they they all left at the same time. So we. We had actually everything we needed to like start a new platform. Um and a lot of ways of landing club shareholders who were not on the board also sideed with us. So we said whatever you guys? do we want we want in um and so we had the sort the capital the the people and the knowledge to to start a new platform and I think the id and and also I mean when you run a company like cleaning club for 10 years you you learn a lot and there’s this long long list of things. That was say all the things we’d do differently if we had the opportunity to to start over again and and so we we got that opportunity so we we incorporated all these learnings into into the design of of upgrade.
Renaud Laplanche: And then one of the big learnings was I think one of the mistakes strategic mistakes we made Ourend Club was to remain of monoline to remain a single product company for too long and I think the personal loan product was a great product. Very useful for consumers to to get rid of of. Credit card debt and andid sort sort handle v credit the right way in a way that’s more affordable and and and more responsible being down there their that every month with a person alone rather than this like revolving credit card. Um. The useful product for consumers. Very big market growing fast but but we should have we we should probably have done more launch more product while person alone was was growing so fast. Um, and so when we designed upgrade. We really designed it as a. A multiproduct platform from the getgo and have of mobile banking and credit card personal loans home improvement auto loans. Um, and there there are a lot of benefits. Obviously we see a lot of synergies between these different different product and a lot of benefits for consumers. Um. When we start thinking of you not as a product really as as a platform as a partner that’s going to be there for like all the the all your financial needs and that’s really how we how we thought about upgrade early on and and what what did what it become.
Renaud Laplanche: Over the last six years
Alejandro Cremades: Ah, when it when when we’re talking about what it has become you know for the people that are listening to really get it. What ended up being the business model of upgrade. How do you guys make money.
Renaud Laplanche: Yeah, so it’s ah it’s really ah of neobank all right? So we have mobile banking and and all kinds of credit products. Um, so the obviouslyss the more customers do with us the more benefits they have or they v keep their bank account with us.
Renaud Laplanche: We can get of higher line on the credit card lower rates on their loans because we we have more data. We have a better understanding of what’s going on in our lives so we can underwrite and service these customers better. Um, and the way we make money is typically by getting some fees. Um. Paid either by customers or by Loan buyers and we see the balance sheet light and Capital light business. So We don’t we we don’t have a big balance Sheet. We typically originate loans and cal balances then sell. To Banks credit Unions Asset managers. So It’s still a silver platform still the marketplace.. It’s not a retail marketplace where there professional investors on the other side Buts of similar Id in terms of not being the bank but but really is so or being the. Like the face of the bank on the consumer side but really outsourcing the entires of capital formation and and balance sheet to to investors.
Alejandro Cremades: So for upgrade upgrade now you guys have raised 587000000 and is reported that the valuation you know is looking at six point three billion which is a remarkable I’m sure that you know this time around, especially you know after your previous rodeos and. Dynamics that you encounter you know, ah board levels and stuff like that. How did you go about doing things differently at a corporate and governance perspective.
Renaud Laplanche: Oh how much time do you have? Ah yeah, it’s like everything is different right? I mean in terms of of organizational structure. So I mean 1 thing we did very early on is.
Renaud Laplanche: Or of operations or in Phoenix Arizona so everything that’s labor intensive is in a low- costt location something we didn’t do at at landing club at the time. Um, even for engineering where we have a core engineering team in San Francisco it’s pretty distributed. Beyond that we have 2 great of engineering centers in in Canada where there’s a great talent pool but lower cost of living and and a various of loyal sort of base of of engineers. There’s been doing a great and good job for us but has a lower cost than what what we would what we would see in in a bay area. Um, the the board and our relations with with investors is different. We. We really supported to keep control of the company. So. We still haven’t so any share with voting rights but we still as the founders of like all the voting rights so very product productive provisions for investors we have veto controls obviously and so we can’t like go raise money without we done agreeing. Or merge the company. Um all that kind of things but so we are protective provisions. So it’s wellde designed and investors are happy with that setup but in terms of day-to-day running the company that really gives us the full control over our our decisions and and how we how we organize the board and how the board works.
Renaud Laplanche: Um, really in the interest of theholders. Not um, which is not what we really saw at at planning club where at some point I was divergent and and the board really worked in its own interest and against the sheholders and that’s that’s why so much. So so many of the ah the Manyup shareholders I did with with us at the time.
Alejandro Cremades: So now Reno imagine you were to go to sleep tonight and you wake up in a world where the vision of upgrade is fully realized what does that world look like.
Renaud Laplanche: Yeah, so we really became like the most one of the most trusted and loved brand consumer brand in in ah I was going say in the Us but in in the world. I mean if I if I can choose when when that type if I try if I wake up depending if I wake up in 5 years or in 20 years um but yeah, it’s it’s really about that. It’s really about building trust with customers and and so having really customers see us as um. Partner and as like someone who’s in their corner and is going to help them through um like all the all the big events in their life and and even the the small ones dayto-day. Um, and when when we launch a new product customers are excited and they um. Did not Trever have that product from upgrade ah than than from anybody else because we know that the the terms of that product and the conditions and the pricing has really been so designed in the best interest of our customers.
Alejandro Cremades: So let’s say I bring you back in time now I put you to a time machine right now and I bring you back in time I bring you I bring you back in time to that moment where is 99 and you are now you’ve you’ve literally given your notice at the law firm. You are. Coming out of the firm. You know, literally one Liberty Plaza in New York City to make it even more more visual and let’s say you’re able to stop on the tracks that the younger Rena that is coming out of the of the building and you’re able to sit that younger self down for a cup of coffee and you’re able to give that younger renault. 1 piece of advice before launching a business. What would that be and why given what you know now.
Renaud Laplanche: Um, it’s really focused on on the people um focus on on the the founders. The first few hires because they they have like so much impact on cur. And and success right? I mean the first people you’re going to surround yourself with with we the co-founders or of the early employees I mean the’re the ones who are gonna sort hire the next level down and and and and then these guys are going to hire the next level down. And and so if you don’t have a great alignment and the right skill set at the top. Yeah, you’re doomed not none of is it doesn’t matter how good the idea is the execution is and isn’t going to follow um to so really like surrounding yourself with. The best people and and and best really takes a lot of time to define right? It’s not absolute best. Ah, that’s going to be the people who um, are going to share your vision are going to say share your excitement um or going to say yes I’m I’m so I’m going to make a lot of sacrifices in the next five or ten years but it’s all worth it because this is where we want to go and this is this is what we want to build together. Um, and so it needs to be that alignment and that energy but also the skill set and the experience right? I mean I I started a software company.
Renaud Laplanche: Without being a technologist and and two finance companies without being without having any is the first one without having any of experience in in consumer finance or banking. Um, so it’s really key to surround yourself with people who have different skill sets different experiences and can be like complementary and like be good in various edge. You’re not so good and and vice versa.
Alejandro Cremades: I Love it. So right now for the people that are listening that will love to reach out and say hi. What is the best way for them to do so.
Renaud Laplanche: Ah, yeah, I’m I’m on Linkedin or we can send me an email. Um, it’s all orlanche at upgrade.com I I read all my emails I try to respond to our. If I don’t respond the first time send send send a new one and I’ll ah you you most likely hear back for me.
Alejandro Cremades: Amazing! Well hey reno thank you so much for being on the deal maker show today. It has been an honor to have you with us.
Renaud Laplanche: That was great. Great to be on. Thank you.
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