Octane Partners with Moore Capital in $300 Million Financing Deal

In a landmark move, Octane® (Octane Lending, Inc.®) has secured a $300 million forward-flow deal with Moore Capital Management, a prestigious firm known for its specialization in private asset-backed finance. This transaction is poised to bolster Octane's capacity in financing major recreational purchases, an area where they are already carving out a strong niche.

Octane has emerged as a leader in the fintech industry, innovating the purchasing process for recreational vehicles, motorcycles, and similar products. Its mission revolves around creating a seamless digital experience, making these significant investments easier and more accessible. With the signing of this agreement, Octane continues to demonstrate its commitment to revolutionizing how consumers approach financing for lifestyle products.

Details of the Agreement

The partnership involves a renewable two-year agreement wherein the Moore Specialty Credit (MSC) Platform has pledged to purchase installment loans on powersports with fixed rates. These loans are generated through Octane's own lending arm, Roadrunner Financial®, ensuring high quality and reliable financing options. The servicing of these loans will be managed by Roadrunner Account Services, LLC, ensuring that customers receive consistent support throughout their loan experience.

With this latest agreement, Octane has now executed a total of $2 billion in forward-flow commitments within the past year. The company's total commitments have surpassed $2.8 billion since it embarked on its loan sales journey in December 2023. This steady growth speaks volumes about Octane's strategy and the confidence that investors have in its model.

Leadership Insights

Steven Fernald, President and CFO of Octane, expressed his appreciation for the partnership with MSC, emphasizing how vital collaboration with such esteemed partners is to Octane's journey. He stated, "We deeply appreciate the MSC team's partnership as we endeavor to deliver innovative, tailored solutions and a seamless, digital experience for dealers and OEMs." His statement indicates the importance of this deal for Octane as it looks to align itself with credible financial institutions that enhance its operational capacity.

From the perspective of MSC, Chief Investment Officer Erik Siegel noted that Octane's strong credit performance and specialized underwriting practices are significant draws for MSC's investment actions. He remarked, "Octane's strong credit performance, focused underwriting, and differentiated approach to secured lending make this a compelling opportunity for MSC."

A Growing Momentum

As Octane continues to expand its capital provider base, the company is gaining momentum in the fintech sector. Just seven months after passing the $5 billion mark in aggregate originations, Octane has now surpassed the $6 billion milestone. Such growth aligns with a vigorous 36% increase in originations year-over-year, demonstrating their capacity to meet the increasing demand for recreational financing solutions.

Founded in 2014, Octane has already built a strong network, working with over 60 OEM partners and more than 4,000 dealership partners. These collaborations, combined with a workforce of 600 across both remote and hybrid roles, position Octane for aggressive growth as it aims to continue transforming the recreational vehicle finance landscape.

Future Implications

As Octane continues to execute similar forward-flow agreements and partnerships, the implications of this design strategy not only enhance the capacity for recreational purchases but also reflect a trend towards higher accessibility and efficiency in the finance sector. The forward-flow transaction with Moore Capital appears to set a precedent for future deals, illustrating how collaboration between fintech companies and traditional investment firms can create innovative pathways for consumer financing.

In conclusion, Octane's recent achievement in securing the $300 million agreement with Moore Capital is not just a significant financial milestone; it is a clear testament to the evolving landscape of recreational financing. As they continue to forge ahead with their commitments and partnerships, Octane stands at the forefront of the fintech revolution, creating waves in the financial services that aim to benefit both consumers and industry stakeholders alike.