Entered 5 New Markets, Launched 9 New Partnerships, & Exceeded $1.2B in Annual Originations
Milestones:
- In 2022, Octane surpassed $1.2B in annual originations, saw a 74% increase in originations year-over-year, and grew originations per dealer partner by 37%
- The company continued to expand beyond powersports and entered five new markets: RVs, electric vehicles, tractors, trailers, and go-karts
- Octane launched nine partnerships with OEMs, including industry leaders like Polaris Inc.
- The company grew dealer digital integrations by 10X, with more than 450 dealers leveraging the award-winning Octane Prequal on their websites at year end
- Octane closed two AAA-rated* securitizations, each of which was upsized to $375M
NEW YORK, January 31, 2023 — Octane® (Octane Lending Inc.®), the fintech revolutionizing the buying experience for major recreational purchases, today announced key 2022 milestones on its journey to connect people with their passions and make buying better.
In 2022, Octane saw significant business growth, increasing originations by 74% year over year through its in-house lender Roadrunner Financial, Inc. The company surpassed $1B in year-to-date originations in October 2022, one year after surpassing $1B in aggregate loans, and six years after issuing its first loan. Octane’s momentous growth is particularly notable given 2022’s pervasive inventory constraints which slowed category growth.
At the same time, Octane strengthened relationships with its over 4,000 dealer partners, growing originations per dealer partner by 37% year-over-year and increasing the number of dealers who funded over ten loans with Octane on a monthly basis by 50%. The company has continued to differentiate itself as a lending partner through its seamless, digital-to-retail experience and innovative digital tools. In 2022, over 400 dealers added Octane’s award-winning, soft pull e-commerce tool, Octane Prequal, to their websites. Octane Prequal gives customers real credit offers while driving incremental ready-to-transact customers to dealerships, all with a soft credit pull.
Octane also expanded the number of dealers and customers it serves through new partnerships and market expansions. In 2022, Octane launched nine partnerships with leading OEMs, including Polaris Inc. Octane also entered five new verticals: RVs, electric vehicles, tractors, trailers, and go-karts. By financing go-karts and e-bikes, which typically retail at a lower price point than traditional powersports vehicles, Octane can support dealer partners with their full price range of vehicles and provide financing for customers making smaller purchases.
As Octane grew, it prioritized responsibly expanding credit access to underserved customers with its proprietary risk model which provides full spectrum credit coverage, helping more people to enjoy the outdoors than any other national lender. The company collaborated with FairPlay, the world’s first “Fairness-as-a-Service” solution for algorithmic decision-making, to help ensure that Octane continues to meet the highest level of compliance with applicable fair lending requirements and bring recreational lifestyle purchases within reach of more enthusiasts.
Octane maintained its strong underwriting discipline and consistent business performance and saw considerable investor demand for its loans. The company completed two asset-backed securitizations in 2022, OCTL 2022-1 and OCTL 2022-2, both of which were upsized to $375M and whose senior class of notes were rated AAA(sf) by Kroll Bond Rating Agency (KBRA)* and AA(sf) by S&P**. Octane has completed nearly $1.9 billion of asset-backed securitizations to-date.
Further, Octane bolstered its balance sheet by raising $100 million of corporate debt from Värde Partners, a leading global alternative investment firm. The transaction closed in October and is being used for general corporate purposes, including investing in activities that will support Octane’s long-term growth strategy. Additionally, Octane nearly doubled the amount of committed capital available to the business on even more favorable terms, bringing its total short-term revolving warehouse funding capacity to $700 million.
“2022 provided a challenging macro backdrop with inflation fueling an increasing cost of funds and expectations for increasing consumer credit losses. Despite these headwinds, we made significant progress across various strategic fronts, including scaling our products and entering new markets, while repositioning the business to face the new macro reality,” said Jason Guss, Co-Founder and CEO of Octane. “As we look into 2023, we believe our strategy positions us to successfully face down whatever unfolds in the macroeconomic environment.”
During 2022, the company received more than ten awards for its performance, products, leadership, and culture. Octane ranked in the top ten percent of the Inc 5000 list of the fastest growing private companies in America and was Certified as a Great Place to Work®.
This press release does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
*KBRA’s ratings are subject to all of the terms and conditions set forth in the related report and KBRA’s website, which you should review and understand, and can be accessed here.
**The full analysis for S&P’s ratings, including any updates, which you should review and understand, is available on standardandpoors.com and can be accessed here.
