Upstart has entered into a multiyear forward-flow agreement under which Castlelake-managed funds may purchase up to $4 billion of consumer loans originated through the Upstart platform. The loans may be purchased over a period of up to 24 months.
The agreement represents the largest transaction between Upstart and Castlelake and expands a relationship that began in 2023.
A forward-flow arrangement commits an institutional investor to purchase qualifying loans as they are originated over a specified period.
The structure can provide Upstart and its participating lenders with a more predictable source of capital while giving Castlelake exposure to a recurring pool of consumer installment loans.
Upstart operates an AI-powered lending marketplace that connects borrowers with more than 100 banks and credit unions.
Its platform supports personal loans, automotive loans, home equity lines of credit and Cash Line, a revolving credit product.
Upstart said more than 90% of loans processed through its platform are fully automated without human intervention by the company.
Castlelake has invested approximately $29 billion since 2015 in asset purchases and asset-based private credit involving consumer and small-business loan originators.
The firm manages approximately $38 billion and is a strategic partner of Brookfield Asset Management.
KEY QUOTES:
“Their continued confidence in our platform is a source of great pride and reinforces the strength of Upstart’s underwriting capabilities and the durability of the credit we originate.”
Sanjay Datta, President of Capital and Enterprise at Upstart
“This new commitment reflects our continued belief in the durability of Upstart consumer installment loans as attractive risk-adjusted exposure for our investors.”
John Lundquist, Partner of Specialty Finance at Castlelake
