Artificial intelligence (AI) lending marketplace Upstart has secured a new multi-year $4bn (£3bn) forward-flow agreement with alternative investment firm Castlelake, building on their long-term collaboration.

Under the forward-flow agreement, Castlelake-managed funds will purchase up to $4bn of consumer loans originated on the Upstart platform over a period of up to 24 months.

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The deal represents the largest program between the two companies to date and builds on prior transactions dating back to 2023.

Since 2015, Castlelake has invested approximately $29bn in both acquiring assets and providing asset-based private credit to consumer and small and medium-sized business loan originators.

“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,” said Sanjay Datta, president, capital and enterprise at Upstart.

California-headquartered Upstart’s platform, which was founded in 2012, includes personal loans, automotive loans, home equity lines of credit, and a revolving line of credit.

More than 90 per cent of loans on the platform are fully automated. 

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“This new commitment reflects our continued belief in the durability of Upstart consumer installment loans as attractive risk-adjusted exposure for our investors,” said John Lundquist, partner, specialty finance at Castlelake. “In our view, this new agreement also recognises what we view as consistency in Upstart’s originations across prior transactions and market environments.”

Castlelake manages approximately $38bn of assets for its global investor base.

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