UpRight (formerly Fund That Flip) Plummets in Investor Sentiment and is Downgraded to "On Probation"
Updated: Sep 28
Once sky-high investor sentiment is now much more hesitant. First the platform was buffeted by fallout from the collapse of Synapse (where it held funds). Now investors claim they're waiting for full re-payment. Meanwhile, the non-performing loan metrics on what remains, appears to be mounting.
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As recently as August 2023 (the previous investor survey), investor sentiment on Upright was sky-high. And an industry wide 87.3% said they would recommend Upright to a friend or family member. And many other investors shared very positive feedback on their experiences.
Today, investors claim they're much more hesitant due to a number of issues. These include fallout from the Synapse banktupcy and claimed issues with incomplete repayment and non-performing loans (in both Upright funds and individual loans).
The Synapse collapse and after-math
Upright used a fin-tech called Synapse to hold money (including investor wallets) and to process distributions.
In Q2 of 2024 Synapse went bankrupt and $13.7 million of Upright money was frozen. Upright says this was deposited behind-the-scenes with AMG National Trust Bank and that all of the missing funds are accounted for in the books.
But investors claim that, to date, Upright has not yet fully clarified if they have physically recovered all of the funds (...and if not, then the amount of unrecovered funds).
On September 16th, Synapse bankruptcy trustee Jelena McWilliams, estimated that about 25% of the $219 million of Synapse deposited funds are still not distributed.
In June of 2024, McWilliams said that there was an $85 million shortfall between what the company owed to depositors (i.e. other fintechs similar to Upright) and the money it actually held in bank accounts. This prompted an investigation by independent auditor Earnst and Young (which still appears to be ongoing).
Upright Pre-Funding Note Fund (PFNF):
This fund is a line of credit funded by investors that was used by Upright to purchase their loans. It was marketed with a 9% APR return. And for some reason, it still contains the tagline "100% interest paid, 100% principal repaid, 100% on-time" (which presumably has not been correctly updated). [Updated September 28, 2024] Upright investors claim that if you are an Upright investor and click on the "start investing" button on that page...it doesn't work (and essentially is no longer available). Non-upright investors get a link to provide more information like accreditation status...and presumably would end up the same place as well.
Upright said on September 19th that 43.7% of investor money has been returned. So that should mean that 56.3% has still not been returned/paid back.
Additionally, Upright reports $18.4 million non-performing loans on the remaining $30.06 million portfolio (which would be a sky-high 61.2% non-performing rate).
If accurate, then...my opinion...this is concerning for the future health of this fund.
Residential Bridge Note Fund (RBNF)
This fund was marketed as a diversified investment in Upright notes yielding around 10%.
Upright said on September 19th that $2.06 million remains unpaid (but did not report what % this entails)
One RBNF investor claims they are still owed 24.44% (and that they believe all investors are being treated the same and thus would be in the same boat).
Individual loans
Upright did not report any statistics on these in their September 19th update.
Investors claim that there are material numbers of outstanding individual loans that are past due. This is consistent with investor allegations about individual loans on the last survey. Some investors claim that some of these are paying interest but not necessarily consistently (and some allegedly not paying at all).
Bottom line
Until these issues are resolved, UpRight's rating has been downgraded to "under probation". And we hope that they can turn this situation around and that investors will report better news in the future. Click here to read the full Upright Review.
