SoFi goes public via SPAC backed by billionaire investor Chamath Palihapitiya

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Chamath Palihapitiya of Social + Capital Partnership speaks on stage at TechCrunch Disrupt NY 2013 at Manhattan Center on April 29, 2013 in New York City. (Photo by Brian Ach / Getty Images for TechCrunch)
  • SoFi is going public via a SPAC backed by billionaire investor Chamath Palihapitiya, according to an announcement made on CNBC on Thursday.
  • SoFi will be valued at nearly $ 9 billion and the personal finance company is expected to receive up to $ 2.4 billion in proceeds from the transaction.
  • SoFi was founded in 2011 and was valued at $ 4.3 billion in its last private funding round.
  • Visit the Business Insider homepage for more stories.

SoFi goes public through a merger with a SPAC backed by billionaire investor Chamath Palihapitiya.

Palihapitiya made the announcement on CNBC on Thursday, and Reuters first reported on talks of the deal this morning, citing sources familiar with the matter.

SoFi will use Palihapitiya’s Social Capital Hedosophia Holdings Corp V to go public. Social Capital Hedosophia Holdings Corp V traded up to 50% in Thursday deals.

The deal will value SoFi at nearly $ 9 billion and bring up to $ 2.4 billion in revenue for the company. SoFi last raised $ 500 million in 2019 for a valuation of $ 4.3 billion.

SoFi was founded in 2011 and offers a premier mobile personal finance service that includes student loan refinancing, investment services, credit cards, and insurance.

“SoFi’s innovative, member-only platform has demystified financial services for millions of Americans and simplified the process for those looking to apply for loans, invest their money, get insurance and refinance their debt, among others. many other tasks that were previously obscure and needlessly complicated, ”Palihapitiya explained in a press release.

Read more: Buy these 30 stocks that easily beat the market in 2020 and are ready for the best global returns in 2021, according to RBC

PSPCs, or blank check companies, have seen their popularity increase over the past year as companies have used the vehicle to go public quickly, avoiding the traditional route of IPOs which could be time consuming and expensive. . Palihapitiya himself has supported a number of successful SPACs including Virgin Galactic and Opendoor.

Palihapitiya said of SoFi: “SoFi’s innovative, member-only platform has demystified financial services for millions of Americans and simplified the process for those looking to apply for loans, invest their money, get In addition, the acceleration of cross-buying by existing SoFi members created a virtuous cycle of compound growth, diversified revenues and high profitability.

With more than $ 70 billion raised from PSPCs in 2020, Goldman Sachs expects more than $ 300 billion to be raised through PSPCs over the next two years.

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