SoFi Takes SPAC Route for Public Listing with $8.65B Valuation

Online lending platform Social Finance, popularly known as SoFi, confirmed on Thursday its decision to go public with a merger with Chamath Palihapitiya-backed blank-check acquisition company.

The merger deal with Social Capital Hedosophia Holdings Corp V (NYSE: IPOE) has valued SoFi at around $8.65 billion and the transaction is expected to deliver up to $2.4 billion of gross proceeds to the combined entity.

“The new investments and our partnership with Social Capital Hedosophia signify the confidence in our strategy, the momentum in our business, as well as the significant growth opportunity ahead of us,” SoFi CEO, Anthony Noto said in a statement.

High Demand for SPACs

Blank-check firms, technically known as special-purpose acquisition companies, have become very popular lately in facilitating the public-listing of privately held companies on US stock exchanges. These dummy companies launch initial public offerings (IPOs) with the sole intention of merger and private companies also finding this route of going public suitable as a traditional IPO approach involves higher regulatory scrutiny.

Social Capital Hedosophia Holdings Corp V raised $800 million in its IPO last October and is one of many SPAC’s maintained by Palihapitiya. Following SoFi’s confirmation, share prices of the company surged by almost 58 percent.

Founded in 2011, SoFi emerged as a student loan refinancing Startup Startup A company operating within its first stage of investing is known as a startup. While startups may give the impression that the company must be new, that is not always the case.Many companies can have this designation after nearly three years of existence. Typically, a company exits the startup status after a period between 3 to 5 years or after successful funding rounds where capital is acquired. Startups tend to derive out of the belief that there is a demand for a service or product which is c A company operating within its first stage of investing is known as a startup. While startups may give the impression that the company must be new, that is not always the case.Many companies can have this designation after nearly three years of existence. Typically, a company exits the startup status after a period between 3 to 5 years or after successful funding rounds where capital is acquired. Startups tend to derive out of the belief that there is a demand for a service or product which is c Read this Term and later expanded its vertices into other Fintech Fintech Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Read this Term areas. It now offers investment opportunities with several asset classes including cryptocurrencies and launched a credit card earlier.

The startup is going public after it receives preliminary conditional approval from the US regulator for its federal bank charter.

“SoFi’s innovative, member-first platform has demystified financial services for millions of Americans and simplified the process for those looking to apply for loans, invest their money, obtain insurance and refinance their debt, among many other tasks that were previously arcane and needlessly complicated,” Palihapitiya said.

“The acceleration of cross-buying by existing SoFi members has created a virtuous cycle of compounding growth, diversified revenue and high profitability.”