Octane Lending, a NYC startup that helps people purchase things like motorcycles, jet skis and snowmobiles, announced Thursday that it closed on a $52 million Series D led by Progressive Investment Company — an arm of well-known insurance firm Progressive. This round values the fintech company at more than $900 million, bringing it within sniffing distance of the coveted $1 billion unicorn status.
Founded in 2014, Octane claims to be the only company of its kind that enables the purchase of what CEO Jason Guss calls “passion purchases” from start to finish, including editorial content, consumer pre-qualification tools, instant financing and digital deal closing. Its in-house lender Roadrunner Financial also provides automated underwriting and various credit products.
The goal, says Guss, is to provide consumers and merchants alike with an end-to-end purchasing process when they buy and sell these powersports vehicles. This includes “inspiration” — the moment a person realizes they want a motorcycle or ATV — finding the right product, and then financing the purchase of that product.
“It sounds simple but it’s a very large ambition. It takes years and years of work, and we are just starting to crack the code on that,” Guss told Built In. “We believe, over the next few years, that we will be able to drive a materially better end-to-end purchasing experience that will help our merchants and manufacturers access far more consumers. And that will help our consumers find the purchase of their dreams much more seamlessly.”
This mission has been especially relevant in light of the pandemic, which brought on a “massive increase” in consumer demand of recreational and sports vehicles like the ones Octane helps finance, according to Guss. Indeed, other tech companies in this space like motorcycle rental platform Riders Share, RV rental platform RVShare and Rollick, which claims to operate the largest online marketplace for finding RVs, boats and powersports vehicles, have garnered renewed interest amid a booming outdoor recreation market.
And Octane is no different. The company has doubled its revenue annually for the past three years, and is poised to originate more than $1 billion in loans in the next year. By 2022, Guss anticipates the company will have doubled its business.
To keep up, Octane plans to use this fresh funding to expand into new product markets as well as grow its team. Over the next year or so, Guss says the company is going to double the size of its tech and product team, as well as “materially increase” the size of its data science team, which is responsible for building the machine learning models that help the company manage risk so it can automate the ordinary manual process of closing loans. In the end, he anticipates hiring at least another 100 to 150 new employees over the next 12 months.