Coinbase-Partnered Social Finance (SoFi) Lending Project Finalizes $500 Million Funding
Sofi—A Lending Startup Closes Qatar Led $500 Million Funding Round
Social Finance, popularly known as Sofi is an online lending startup that just closed its Qatar led $500 million funding round. The firm intends to use the cash injection to assist it to invest in its growth, as it continues to strengthen its balance sheet.
Despite having injected half a billion dollars into its balance sheet, its valuation is expected to remain at $4.3 billion dollars. It is the same valuation it had two years ago after completing a funding round that at the time was led by Silver Lake.
Qatar Investment Authority is Sofi’s newest backers. The investment authority is based in Doha and operates as a sovereign wealth fund as well as private equity. At the moment, the company has investments totaling $12 billion and has major interests in companies such as HelloFresh, Flipkart, and Uber, among others.
Prior to this new round of funding, Social Finance had also attracted funding totaling $1.9billion from various companies and individuals. According to PitchBook, the money had been raised by names such as Peter Thiel and SoftBank Capital. Bloomberg News first reported in April that Social Finance was looking to raise more money to invest in its operations.
The latest round of funding has come at a time when the investment space has started recording a massive uptick in private capital interests. By the end of 2018, Venture capital investments had risen to $4.4 billion in the personal finance sector. Market statistics indicate that this was quite an increase, given that the venture capital investments only totaled $1billion five years ago.
Introduction Of New Products
Sofi, based in San Francisco has lately been on a product introduction spree that has seen it introduce a variety of products into the market. It started the year by announcing cryptocurrency trading, a fete that was achieved by partnering with Coinbase.
It then went ahead to launch its zero-fee Sofi branded ETFs. Currently, it has plans to introduce a credit card by the second half of 2019. The first half of the year saw the company rolling out a product known as SoFi Money. This is a cash account that also comes with a 2.25% APY.
According to its CEO, Anthony Noto, the company has worked aggressively over the past few months to grow the company into a mobile-first financial platform. The product development team has been working round the clock to come up with a platform where clients can invest, spend, save, borrow, and even get to protect their money.
Social Finance was launched in 2011. At the time, its primary focus was on refinancing millennial student loans. However, the company has been changing with the times and has since grown to include wealth management services, mortgage refinances, mortgage loans, and personal loans.
The company is said to have more than seven and a half million registered users, and around seven hundred thousand members. According to its CEO, the company does not have any plans to go public this year, although this may happen down the line.