According to Business Insider, Upstart has raised $35 million in Series C funding. Unlike traditional banks that mostly rely on FICO score and credit history, Upstart goes through a variety of 'signals,' such as the school you went to, GPA, standardized test scores, and the quality of employer, to quantify the borrowers' ability to pay back loans. Based on that score, Upstart connects borrowers with investors on its platform.

'What [Upstart] has done here is identifying 'future prime borrowers',' Girouard told Business Insider. 'Our modeling is really focused on not what you did in the past, but what's likely to happen to you in the future. These are people that are going to be doing great things, earning a lot of money, becoming wealth creators over time.'

But that doesn't mean only the Ph.Ds and Ivy League grads will get priority on Upstart. A literature major from Harvard may not necessarily get a better score than someone with a professional job like nursing.

'Nurses are not the highest earners in the world, but they're also predictably employed because there's always a need for them. So what that implies is whatever school you went to, if you had a nursing degree, you may get a pretty good loan on our platform,' Girouard said.

Upstart was founded in 2012 with the idea of connecting young entrepreneurs with investors. But last year, it pivoted to the current online lending platform after realizing its future-looking analytics would be better used in the personal loan market.

The decision to pivot seems to be paying off so far. It's issued more than 8,700 loans worth a total of $125 million in the past year, with about $20 million coming in June alone. Considering it targets millennials between the age of 22 to 34, and most loans are below $35,000, it's not a bad growth rate.

And investors are buying into Upstart's concept too. On Thursday, it announced a $35 million series C round led by Third Point Ventures, the Wall Street firm founded by Dan Loeb, who's best known for hiring Marissa Mayer as Yahoo's CEO when he was on its board.

Other investors include Khosla Ventures, First Round Capital, and Collaborative Fund, as well as Google's executive chairman Eric Schmidt and Salesforce CEO Marc Benioff.

For all its potential upside, however, Upstart is in one of the most competitive markets. Online lending has created some of the most valuable startups including Lending Club, which went public last year, and Prosper, which is now valued at roughly $1.9 billion. There are other online payment services that mostly target millennials, like Affirm and Digit, too.

But Girouard doesn't believe this is a zero-sum game. He sees Upstart's technology to be good enough to make it stand out in a crowded market. Down the road, he wants to expand into other areas, such as mortgages, once he locks down the current users to become loyal customers.

'We're really doing something to differentiate,' he said. 'People in their 20s and 30s don't generally get the quality of credit, the low price of credit that you would get if you were more like 40 or 50. And we really think there's a way to use data science to fix that.'