Online lending startup SoFi said to explore deal to go public

FILE PHOTO: Anthony Noto, then-chief financial officer of Twitter, holds his phone during the first day of the annual Allen and Co. media conference in Sun Valley, Idaho July 8, 2015. REUTERS/Mike Blake/File Photo

Online lending startup Social Finance Inc (SoFi) has held discussions with blank-check acquisition companies about a deal that would allow it to debut in the stock market, people familiar with the matter said on Monday.

The discussions show that going public is solidly in the sights of SoFi’s CEO, Anthony Noto. A former Goldman Sachs Group Inc investment banker and Twitter Inc’s ex-chief operating officer, Noto succeeded SoFi co-founder Mike Cagney, who stepped down in 2018. Noto said last year that going public was in the company’s long-term plans, but had cautioned it was not a priority.

The San Francisco-based company, which was valued at $4.8 billion in a private fundraising round last year, has held talks with a number of so-called special purpose acquisition companies (SPACs), the sources said, cautioning there is no certainty an agreement would be reached.

The sources requested anonymity because the talks are confidential. SoFi did not respond to requests for comment.

A SPAC is a shell company that raises funds in an initial public offering with the aim of acquiring a private company, which then becomes public as result of the merger.

SPACs have emerged as one of Wall Street’s most popular investment vehicles in 2020, with 208 SPACs raising more than $70 billion so far this year, according to SPAC Research. United Wholesale Mortgage and Finance of America were among the mortgage lenders that agreed to go public this year through SPACs.

Founded in 2011, SoFi capitalized on the retrenchment of banks from large swaths of consumer lending in the aftermath of the 2008 financial crisis. It started with refinancing student loans and expanded into mortgages and personal loans.

The company said in October it had received preliminary, conditional approval from the U.S. Office of the Comptroller of the Currency in its application for a national bank charter. The company has also branched out into stock trading and cash management accounts.

SoFi has raised over $3 billion in capital, according to PitchBook data. Its financial backers include private equity firm Silver Lake and billionaire investor Peter Thiel.

Reuters

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.