Outdoorsy partners with Lead Bank for RV lending solutions

Outdoorsy CEO Jeff Cavins join Yahoo Finance to discuss his company's push to help more people buy RVs.

Video Transcript

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ADAM SHAPIRO: All right, we're a little under 30 minutes to the closing bell. Let's see where things are lining up as we get ready to ring that closing bell and hit the gavel. The Dow is back up. A little off at session highs, though, but still up 224 points. I'm not mad at that. S&P 500 up 24 points, and the NASDAQ is up 30 points. We got you covered. We're going to take you to that closing bell in just a bit. We also have you covered if you're looking to get the family out and you want to go camping.

Now, we've had the folks from Outdoorsy on before. That's the giant online rental firm where you can rent an RV, and you can do it just about anywhere in the country. But there's something new here that you need to know about. Jeff Cavins is the CEO at Outdoorsy. We bring him in now to talk about what's happening in the space. Because even if you're not going to rent, you've now partnered to make it possible for people to buy. A lot of people like RVs. So tell us, what's this about?

JEFF CAVINS: Yeah, that's right. Thank you for having me. You know, Outdoorsy is-- outdoorsy.com is an online marketplace that features thousands of RVs for the millions of people who want to rent them. And we learned that this entrepreneurial growth on our platform from people that owned RVs, they were struggling with financing, financing their businesses, and even financing the growth of building out their-- it could be a fleet of two units or we've had users have grown up to over 200 units.

So what we've done is, we've taken a different approach to how we address our marketplace by bringing a banking function or a financing function into the marketplace to help our listers build their businesses on the platforms. So we're now offering RV financing and RV refinancing. Importantly, RV refinancing is important because, because it's a depreciable asset, banks don't offer refinancing services. But because on Outdoorsy this asset generates an enormous amount of cash flow for users, we're able to launch a refinancing business that takes the capital-- the capital burden off of the listers on our platform and it frees up more capital for them to invest in their businesses on Outdoorsy.

SEANA SMITH: Jeff, what are you seeing--

JEFF CAVINS: And we're--

SEANA SMITH: Go ahead.

JEFF CAVINS: Oh, I'm sorry. Go ahead.

SEANA SMITH: No, I was just going to say, what are you seeing demand-wise? We talk about there's so much interest in RVs. And certainly, it makes sense that the partnership that you just reached with Lead Bank, that certainly would be the time to do this. But what are you seeing just in terms of the number of people that are interested in renting RVs right now is the same as it was, say, six or 12 months ago?

JEFF CAVINS: Well, 2020 was a record year for the company. I think we had mentioned in the press we'd grown 4000% during the period of 2020, from the advent of the pandemic to the end of October. This year, the company is up almost 150% over 2020. And as you probably have followed the OEMs, there's almost $16 billion in backlog from the OEMs. They won't be able to refill the dealer channel until late 2022 because of that backlog is already pre-sold. So consumers have gone crazy for RVs. It's a surge in industry that everyone's essentially having a hard time keeping up with. And it's usually-- for a consumer, it's usually the second largest investment they'll make, other than their home.

But strangely enough, 90% of RV owners never compare further-- they never compare the loan. They don't shop for loan alternatives. And many are trapped in interest rates of 12.99% on an asset that they'll finance for 20 years, but it'll depreciate like a car. You know, it has the same kind of steep depreciation curve an automobile will have. So very unfortunate financial decisions are being made in the retail chain of how the consumer purchases an RV, and then, more importantly, how they're financing the RV.

ADAM SHAPIRO: You know, it's fascinating if you've ever been to Elkhart, Indiana, where, you know, they make these things. It really is just incredible. I'm curious, what are the most popular type of RVs? Is it the Airstream, those big, you know, metal Airstreams that people love? Or is it the VW Vanagon? On your site, what are people picking?

JEFF CAVINS: Well, the most popular for the marketplace are the small footprint, the camper vans, the class Bs, which are typically built on the Mercedes chassis or the Ford chassis. 89% of the growth of our platform comes from Gen Z and millennials, which is unique to the RV industry because the average owner typically was a Boomer or a retiree. But we like to say millennials built Uber, and now millennials and Gen Z now are building Outdoorsy. And they prefer lightweight, small footprint, easy on the environment. They're very environmentally conscious, so they tend to like the smaller units, which are camper vans, class Bs, and anything that's built on the Mercedes chassis is extremely popular.

SEANA SMITH: Jeff, there have been reports that Outdoorsy is exploring a potential IPO, that it could actually come before the end of this year. What can you tell us on that?

JEFF CAVINS: Well, yeah, we've seen, you know, the news has made its way into the market. I can tell you that council and our underwriter partners have informed me that I can't discuss it. We are in what's called a "quiet period." So if I discuss our plans and our timing, I potentially violate SEC rules around the quiet period, and we could be put in a essentially cooling off period by the SEC. So the company is looking at our options. We haven't made a decision on time. But you can imagine there is a lot of interest in us going down that path.

ADAM SHAPIRO: So nobody wants Gary Gensler beating you up, so we're going to let you off the hook on that one. But curious, are you on the road right now? We've had guests join us, by the way, inside their cars. But given what you do, what are you driving?

JEFF CAVINS: Yeah, well, unfortunately, I'm not in an RV. I don't know what the thing is. It's a Nissan, I think. I had a-- I had a meeting at a ranch with somebody north of Dallas, an executive. So I'm actually at the Dallas-Fort Worth airport soon to board a flight to my next city. But I'd much rather be in a Winnebago Revel if I could be.