A PayPal sign appears at the entrance to the company's headquarters in San Jose, California, on May 28, 2014. Reuters

PayPal has made a strategic investment in LendUp, a financial services startup that offers loans to those who are considered too risky by banks.

LendUp announced the move Thursday without disclosing the sum of the loan. Sasha Orloff, LendUp co-founder and CEO, said the startup was “thrilled” to have PayPal as an investor.

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"We share a common vision of how technology can democratize industries, and that's exactly what LendUp is doing,” Sasha Orloff, LendUp co-founder and CEO, said in a statement about PayPal and the startup. “We're building our own technology to create new financial products and experiences for the 56 percent of Americans shut out of mainstream banking due to poor credit or income volatility—right on a mobile phone.”

LendUp, an online lender, calls itself a “socially responsible online lender” working to help the “emerging middle class,” or the 56 percent of Americans who banks refuse because of poor credit or income volatility. The startup, which was founded in 2012, offers loans, credit products and free online education courses.

“Our vision for our customers in eligible states is universal access to credit that expands over time — and along the way, we give them the chance to improve their credit scores, too,” the company’s site explains.

Besides the PayPal investment, LendUp also announced some changes within the company. The startup said CFO Carrie Dolan, who has an extensive career in finances, is now board advisor. LendUp also announced it’s promoting Vijesh Iyer, who worked at Capital One and PayPal, to COO of the company. The startup recently hired Mandeep Walia, who also worked at Paypal, as chief compliance officer. LendUp announced more additions to its team on Thursday.

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PayPal’s Investment

Investment in LendUp is one of the latest actions PayPal has taken to make its business standout among its competitors in the digital payments market. PayPal seems to be going after those who need financial help and small businesses. Recently, the company launched a toolkit for small business owners, called "Business in a Box.” For the toolkit, PayPal worked with accounting software firm Xero and Woocommerce, an open source e-commerce plugin that helps business owners manage their WordPress sites.

Last May, PayPal invested in the micro-investing platform Acorns, which works to help individuals with their finances. The platform is especially popular with younger people. About 75 percent of Acorns’ customers are millennials who are trying to better their financial lives. At the time, Paypal touted that it knew “a lot about millennials” because of Venmo.

Besides investments, PayPal partnered with Google in April to make checking out easier in stores and on Android apps. The feature allows Android Pay users to link their PayPal accounts and use it with Android Pay and gives them the option of paying with PayPal instead of their debit or credit card.