Anthony Noto, the CEO of SoFi, says business has been booming.
SoFi which started out primarily in the student loan refinance business, has expanded into home loan refinance, robo advisory, and brokerage services that facilitate small stock orders and even cryptocurrencies trading.
The 2020 recession that was brought on by the COVID-19 pandemic caused a slowdown in student loan refinance. But they’ve seen a huge increase in home loan refinancing due to low interest rates and a surge in retail investing after the market crash.
The company is planning to go public through a deal with the SPAC Social Capital Hedosophia Holdings Corp. V (NYSE: IPOE).
SPAC stands for special purpose acquisition company. It’s a nontraditional way for a company to begin trading publicly. The SPAC has an initial IPO and sells shares to raise capital. The capital raised is then used to buy or merge with an existing business.
The decades-old process saw a rebirth in 2020 and shows no signs of slowing down in 2021.
SPAC mastermind Chamath Palihapitiya has been an intricate part of the deals that brought several big-name companies public. The list includes Virgin Galactic Holdings, Inc. (NYSE: SPCE), Opendoor Technologies Inc. (NASDAQ: OPEN), and Clover Health Investments (NASDAQ: CLOV).
He is now leading the charge on the SoFi deal.
There are several regulatory hurdles to jump through and a final vote on the deal has not been scheduled. If the deal closes as proposed, SoFi will be valued at $8.7 billion.
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