CycleOne Financial is seeking an undisclosed amount of funding for the company’s first Series A round, President Logan Riley told Powersports Finance.
The Orlando, Fla.-based powersports lessor launched in April 2015, and has raised $4 million in seed funding to-date, Riley said. CycleOne’s first seed round garnered the company $1 million, which allowed CycleOne to get “up and running.”
Now, CycleOne’s top priority is raising capital to expand the startup’s dealer reach to the entire state of Florida. CycleOne makes leases for 15 “hand-selected” dealerships in the Orlando and Tampa Bay areas.
However, securing investors has been a challenge for the startup, given the CycleOne’s “newness” to the powersports industry, Riley said.
“They [investors] all want to see the financial cycle of how your portfolio performs,” he said. “We’ve only been in business [about] two years, which is usually the end of a financial cycle. I think it will get easier, but the subprime motorcycle leasing space isn’t really a space that a lot of the investors know specifically. So it’s a challenge as far as trying to get them invested.”
Many investors are interested in the financing space, but not many are interested in the subprime motorcycle leasing space, specifically, as the risk factor is higher, Riley explained. “That space is challenging to investors,” he said.
CycleOne Financial is a subprime lessor that leases all pre-owned motorcycles included in the NADA Guide, Riley said. Lease amounts can be up to $12,000, and lease terms range from two to four years, but can be extended up to five years, depending on the lease amount and consumer credit.