Subprime card lender introduces ex-Barclays exec as CEO

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A credit card upstart that targets subprime borrowers and was recently spun off from LendUp announced a $200 million equity funding round on Monday.

The San Francisco company, Mission Lane, also introduced a former Barclays and Capital One Financial executive as its CEO. Additionally, the firm unveiled $300 million in debt funding that it said will further enable growth.

The moves amounted to a coming-out party for Mission Lane, which was separated from LendUp in December after investors determined that the firm’s personal loan and credit card segments would both perform better as standalone businesses.

Shane Holdaway became CEO of Mission Lane in August after roughly a year in his role as chief executive of Barclays’ U.S. consumer bank.

“This unexpected but incredibly compelling opportunity kind of came out of the blue,” he said in an interview Monday. “And I jumped at the chance.”

Mission Lane is focusing on the approximately 100 million Americans who either have below-prime credit or do not have a credit score at all. Holdaway said that the big U.S. credit card issuers largely abandoned subprime borrowers following the Great Recession.

“The few loans and credit cards that are available to them are often complex, difficult to decipher and laden with inexplicable fees,” he wrote in a LinkedIn post that was published Monday.

An online offer for the Mission Lane Visa credit card on Monday listed a variable annual percentage rate for purchases of 29.99%, along with a $59 annual fee. Last week, the average APR on credit cards for customers with poor credit was 25.21%, according to a report from

Mission Lane inherited the credit cards that were previously issued by LendUp, an 8-year-old online lender based in San Francisco that focuses on a similar customer base.

The equity funding round that was announced Monday includes money from QED Investors and Invus Opportunities, both of which have previously invested in LendUp. The debt funding is being provided by Goldman Sachs and Oaktree Capital Management.

The funding will be used to fuel loan growth by reaching out to more potential customers, and to build scale up by investing in technology and new employees, according to Holdaway.

Mission Lane, which has offices in San Francisco and Richmond, Va., has 120 employees. It is one of a number of credit card startups — including Petal and Fair Square Financial — that focus on the subprime segment.

Holdaway said that Mission Lane’s modern technology enables the company to do a better job of identifying people who will be able to succeed in rebuilding their credit. He also indicated that the firm’s digital tools for customers will increase the chances that they will be able to repay their loans and boost their credit scores.

Nigel Morris, a co-founder of Capital One and a managing partner of QED Investors, is Mission Lane's chairman. He is renowned in the credit card business for the work Capital One did in managing the risks associated with less creditworthy borrowers.

Holdaway is also a Capital One veteran, having spent 12 years at the McLean, Va., company, including nearly five years as president of its Canadian credit card unit.

“Shane brings great vision and experience to a team that has the skills, knowledge and passion to re-imagine the credit card business,” Morris said in a press release.

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Credit cards Subprime lending Venture funding Career moves Fintech LendUp Barclays Capital One