Social Finance Inc. (commonly called SoFi) has raised $1 billion in a Series E funding round led by Japanese media giant SoftBank Group, marking the largest single financing round in the FinTech space to date. Launched four years ago, SoFi helps graduates of top-tier universities refinance student loans at lower rates. Since then, SoFi has expanded its services to include personal loans and mortgages. In 2014, SoFi became the first marketplace lender to secure an investment grade rating from S&P and Moody’s for its senior notes in a securitization.
According to the official press release, existing investors include Third Point Ventures and affiliates of Third Point LLC, Wellington Management Company LLP, Institutional Venture Partners (IVP), RenRen, Baseline Ventures and DCM Ventures. This round of funding is aimed to accelerate the company’s growth as the primary financial services partner for traditional banking.
The total equity investment in SoFi after the Series E round reached $1.42 billion. Founded in 2011, the company has been profitable since 2014. Funds raised in the last round following the round in February 2015 indicate the rapid growth of the company and underscore its leadership position in the loan refinancing market.
“This funding will dramatically advance expansion of our disruptive products and experiences, and in turn, meaningfully benefit financially responsible individuals. Our trajectory is clear: we are well on our way to becoming the most trusted financial services partner in the U.S.”, said SoFi’s CEO and co-founder Mike Cagney.
SoftBank was an ideal backer for SoFi with its billionaire founder Masayoshi Son being a patient investor, said Cagney. “As a private company, SoFi can take risks in a way that would be harder if it were publicly traded”, he added.
We at LTP, having tracked both FinTech and Softbank for many years, are excited to see Softbank and the charismatic Masayoshi Son play in the FinTech space. Perhaps this is a validation of how attractive this segment has become!
SoFi is a market leader in student loan refinancing with over $4 billion in loans issued. The company is focusing on student loans, mortgages and personal loans. SoFi’s proprietary approach takes into account merit and employment history to offer customized credit products. Along with earning compelling rates of return, SoFi enables individual and institutional investors to create a positive social impact in the communities they operate. To learn more, visit www.sofi.com
About the SoftBank Group
SoftBank is a Japanese multinational media giant headquartered in Tokyo. The company engages in telecommunication and Internet businesses. SoftBank consists of the Mobile Communication segment, the Sprint segment, and the Fixed-line telecommunication services in America. SoftBank is a longtime investor in tech startups, with Alibaba Group Holding Ltd, Yahoo Japan Corp among in its portfolio. More recently, it led a $500 million investment in Indian online marketplace Snapdeal in August, and injected $250 million into Singapore-based ride hailing app GrabTaxi last year. To learn more, visit