Upstart announced a $1.5 billion forward‑flow agreement with Castlelake, a global alternative investment firm that specializes in asset‑based private credit. The 12‑month deal allows Castlelake to purchase up to $1.5 billion in consumer loans originated through Upstart’s AI‑powered lending marketplace.
The agreement follows Upstart’s Q3 2025 earnings, where revenue rose 71% to $277 million and GAAP net income turned to $31.8 million from a $6.8 million loss in Q3 2024. Adjusted EBITDA surged to $71.2 million from $1.4 million. By securing Castlelake’s commitment, Upstart can reduce reliance on its own balance sheet, freeing capital for strategic initiatives and enabling continued loan origination growth amid market volatility.
The forward‑flow provides a stable source of capital that diversifies Upstart’s funding mix, complementing existing commitments from Fortress and Blue Owl. It also signals confidence in Upstart’s asset quality and underwriting model, allowing the company to allocate its own capital to expanding its AI platform and entering new loan segments.
In Q3 2025, personal loan originations grew 73% to $2.7 billion, auto loans increased fivefold to $128 million, and home loans grew fourfold to $72 million. The strong mix of high‑margin personal loans underpins profitability, while rapid growth in auto and home segments indicates expanding market reach.
CFO Sanjay Datta said the partnership “will help our platform continue improving the lending experience and outcome for all borrowers.” CEO Dave Girouard noted that the AI platform is “performing exactly as designed, rapidly adapting to evolving macro signals while delivering strong results.”
Investors reacted cautiously to the earnings announcement, with concerns about the slight revenue miss and guidance for the next quarter. The new Castlelake agreement is viewed as a positive tailwind, providing a stable source of capital that can support future growth.
Upstart maintains its guidance for 2025, expecting continued loan origination growth and margin expansion as the AI platform scales. The forward‑flow agreement positions the company to weather potential market tightening while pursuing strategic expansion.
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