Large-ticket recreational purchases have long been hampered by fragmented financing processes that leave both dealers and consumers frustrated with slow decisions and limited credit options. While Americans spend $150B annually across powersports, RV, marine, and outdoor power equipment markets, the purchasing experience has remained largely manual and inefficient, forcing consumers to navigate multiple lenders and dealers to struggle with closing deals. Octane addresses this friction by providing an end-to-end digital financing platform that combines instant prequalification technology with captive lending services, enabling dealers to close more sales while consumers secure competitive rates across credit profiles. Since launching its in-house lender Roadrunner Financial in 2016, Octane has originated over $7B in loans, grown originations by 30% year-over-year, and achieved GAAP profitability while serving 4,000 dealer partners and 60 OEM brands. The company’s recent introduction of Captive-as-a-Service allows manufacturers and retailers to offer white-label financing under their own brand without building lending infrastructure from scratch, further positioning Octane to capture share in underserved consumer finance markets.
AlleyWatch sat down with Octane CEO and Cofounder Jason Guss to learn more about the business, its future plans, recent funding round that brings total funding to $342M, and much, much more…
Who were your investors and how much did you raise?
Valar Ventures led the round with participation from Upper90, Huntington Bank, Camping World and Good Sam, Holler-Classic, and others.
It was our Series F round, and we raised $100M.
Tell us about the product or service that Octane offers.
We provide a suite of tools that help merchants drive retail and consumers seamlessly make their most important purchases. Our tools for retailers include customer acquisition services and products that help their customers more seamlessly transact and find the right purchase for them.
Examples of our products include Octane Prequal and Prequal Flex, industry-specific dealer financing portals, and customizable tech to help dealerships reach more buyers and increase profitability. Our latest offering is a white label captive lending platform that allows retailers and manufacturers to offer financing to their customers under the brand of their choice; partners enjoy the benefits of a captive lending program without the cost or setup of starting their own captive lender from scratch.
Captive-as-a-Service brings together technology, underwriting, loan processing and servicing, and capital markets execution in a single platform under the partner’s chosen brand We enable our captive partners to diversify their revenue streams, build long-term enterprise value, and strengthen their customer retention through lifecycle marketing.
We started in powersports (motorcycle, all-terrain vehicle, UTV, personal watercraft, and snowmobile) and have since expanded to the RV, marine, mower, tractor, trailer, and adjacent markets.
What inspired the start of Octane?
Octane started in 2014 when we realized that the lending experience in the powersports industry was slow, manual, and fragmented, and we believed we could solve it by enhancing the technology experience. However, we soon realized we could drive even more value and better support merchants and consumers if we integrated a superior technology experience with a full-spectrum credit offering. So, in 2016, we launched our in-house lender, Roadrunner Financial, Inc.®.
We worked with original equipment manufacturers and dealers in the powersports space to understand their needs, and we developed a seamless, end-to-end financing experience that helps them reach more customers and increase profitability.
We’ve continued to enter new markets, enhance our technology, and introduce new offerings, like our innovative Captive-as-a-Service offering, helping us become a leading financing and technology partner in the industries we serve.
How is Octane different?
We compete across three values:
- Experience: Our ultimate goal is to be the fastest and easiest platform for merchants and consumers. We obsess over automation, workflow enhancements, and making the experience feel magical to our customers.
- Credit: We aim to serve as many customers competitively and responsibly as possible. Our never-ending focus building more and better models is a large part of our value and helps our merchants serve more creditworthy customers.
- Value-Added Services: We believe that the best companies need to offer both tech and lending. We consistently introduce new products to help merchants increase profitability while improving the way that consumers make their most important purchases.
We offer technology services not typically offered by lenders, as well as an integrated lending product. That significantly helps retailers and consumers.
Additionally, as more of our business shifts to white label captive partners, we’re able to offer highly customized and differentiated solutions.
What market does Octane target and how big is it?
We currently operate in the powersports (motorcycles, UTVs, all-terrain vehicles, personal watercraft), RV, marine, and outdoor power equipment markets (mower, tractor, trailer), which have combined retail sales of $150B.
In the longer term, we believe we can provide value to any market where consumers make a large-ticket purchase and where retailers and manufacturers can benefit from owning and integrating their own financial products throughout the purchasing journey.
What’s your business model?
We are a fintech company that provides financing for major purchases, including powersports vehicles, RVs, and more.
We make platform fees (paid by either merchants or OEM partners primarily for promotional financing), servicing income, performance fees (income paid to us pending loan performance), and for loans we sell, we earn gain on sale. For loans we hold, we earn interest income.
How are you preparing for a potential economic slowdown?
We feel confident in our business and our ability to navigate various economic headwinds given the strong foundation we’ve built; additionally, we’ve always been committed to responsible lending to set our customers and dealers up for success.
We’re future-proofing our business by introducing new offerings and technology, developing a strong, diversified capital markets approach, and we’ve continued to sign new partners that will increase our reach and market share.
What was the funding process like?
We started putting together materials in late Q1 to go out for a formal process, but decided to hold back when the market disrupted in April. Valar, an existing investor, then preempted the round with a term sheet. We then circled with a few firms we were close with and decided to move forward with Valar.
Though the terms were largely agreed in May and the term sheet signed in June, the round ended up taking longer than typical to close because of the dynamics of the secondaries (the round was 50% primary, 50% secondary) and ultimately closed at the end of October.
What are the biggest challenges that you faced while raising capital?
We tend to optimize for time, certainty of execution, and partner quality during fundraises. Since we were preempted by an existing partner of multiple years, this was an ideal outcome for us. We were also able to bring multiple new investors into the round to add external validation (~40% of the capital in the round).
What factors about your business led your investors to write the check?
James Fitzgerald, founding partner at Valar Ventures, our lead investor, shared: “One of the investing lessons of the past two decades is that the best tech companies can compound for far longer than expected. Octane’s unique offering supports dealers and OEMs with software and financing solutions unavailable elsewhere. We expect Octane to continue to take market share — both in its existing markets and in those it’s only begun to enter — for a very long time. We are excited to continue backing this team and to partner with them for another decade, or longer.”
James Fitzgerald, founding partner at Valar Ventures, our lead investor, shared: “One of the investing lessons of the past two decades is that the best tech companies can compound for far longer than expected. Octane’s unique offering supports dealers and OEMs with software and financing solutions unavailable elsewhere. We expect Octane to continue to take market share — both in its existing markets and in those it’s only begun to enter — for a very long time. We are excited to continue backing this team and to partner with them for another decade, or longer.”
Billy Libby, Managing Partner at Upper90, shared: “It’s been impressive to watch Octane’s execution in becoming a clear leader in the powersports market. Now the company is scaling its proprietary underwriting engine and end-to-end technology platform as it expands into new markets and helps dealers grow their profits and deliver better financing experiences to consumers. Few public or private companies are growing as rapidly — and profitably — as Octane, and we’re excited to be part of their continued growth.”
Billy Libby, Managing Partner at Upper90, shared: “It’s been impressive to watch Octane’s execution in becoming a clear leader in the powersports market. Now the company is scaling its proprietary underwriting engine and end-to-end technology platform as it expands into new markets and helps dealers grow their profits and deliver better financing experiences to consumers. Few public or private companies are growing as rapidly — and profitably — as Octane, and we’re excited to be part of their continued growth.”
What are the milestones you plan to achieve in the next six months?
We recently announced our Captive-as-a-Service offering for the powersports and RV industries and are bringing that offering to additional markets.
We also plan to launch exciting new partnerships that will expand our reach and help more retailers increase profitability.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Focus on the fewest but most important things for the business to have the highest chance of making a meaningful change in the primary KPIs that matter (typically revenue or a customer metric).
Where do you see the company going now over the near term?
We expect to enter additional markets and deepen our penetration with leading OEMs and dealer groups in multiple industries.
We think we can ultimately provide value to any market where consumers make large-ticket purchases and where retailers can benefit from owning and integrating their own financial products into the customer purchasing journey.
What’s your favorite winter destination in and around the city?
I love walking around the West Village and popping into the many amazing restaurants. The architecture and food scene are amongst my two favorite things about New York.
