SoFi has reportedly raised a staggering $1 billion in equity money.
This latest round of financing sees the platform’s valuation surge to around $4 billion. The titanic fundraise appears to have taken place in rather under-the-radar fashion, but a document reviewed by the Wall Street Journal (WSJ) suggests that SoFi closed the $1bn round within the past couple of weeks. SoFi representatives have declined to comment on the news.
Again according to the WSJ, SoftBank Group Corp. has taken the lead role in the monster funding round. SoftBank is a Japanese telecommunications and Internet company, and was one of the original equity backers of Alibaba Group.
SoFi closed a $200m Series D equity fundraise in February this year – a round which valued the company at $1.3bn. The platform’s valuation has since skyrocketed to the present $4bn. SoFi’s ability to attract such massive amounts of venture money also appears to have temporarily staved off its appetite for a public listing. In March, the company was rumoured to be planning to raise $500m via an IPO in the latter stages of this year. The poor performance of Lending Club and OnDeck's shares may also have been a factor in the platform's decision to hold off on floating. SoFi has indicated that it is already profitable, but it does not currently disclose revenues or other financial information publicly.
SoFi’s bread and butter is refinancing student debt, which has now grown to $1.2 trillion in the States, up 70% from 2008. But the platform also facilitates personal loans and mortgages.
SoFi blew through the $2bn milestone in terms of cumulative origination volume in April. The platform continues to operate at the forefront of the securitisation space, having packaged up the alternative lending industry’s first AAA rated deal in late July. The landmark rating was conferred upon the securitisation’s senior note (which made up 93% of the deal) by DBRS, with Moody’s conferring an Aa2 rating on the same tranche. It was also the industry’s largest securitisation to date, at $417.6m. At the time of this deal, just 4 months after SoFi passed the $2bn mark, the platform had lent over $3bn to students and young professionals. It expects cumulative lending to exceed $5bn by the close of 2015.
The fresh injection of $1bn will be instrumental in realising the platform’s grand designs. The expertise of SoftBank should also prove invaluable. SoftBank Chief Executive Masayoshi Son – one of the richest men in Japan – joins a decorated crop of SoFi investors that includes PayPal Co-Founder Peter Thiel and the esteemed fund manager Daniel Loeb (Founder and CEO of Third Point LLC), who bought into the company during its Series C and D rounds respectively.
SoFi is the third largest marketplace lender in the States, and is now snapping at the heels of fellow consumer lending platform Prosper, which crossed the $4bn mark in cumulative lending in July.
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