US-based financial technology company SoFi has raised $1 billion in a Series E funding round, led by SoftBank Group.
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Other investors included hedge fund Third Point LLC, private equity firms Third Point, Institutional Venture Partners, Wellington Management Company, social network service RenRen, venture capital investment companies DCM Ventures and Baseline Ventures.
SoFi initially focused on enabling college alumni to lend money to relatively recent, well-educated college graduates, refinancing their student loans as a next step in the young professionals’ careers.
For SoFi, the $1 billion in funding provides it a treasure chest to compete against traditional banks to convert new borrowers to its platform. An earlier proposal to raise $800 million valued the company at about $3 billion, people familiar with the matter said in July. Both the companies are of a positive view that the Series E funding round will speed up the growth rate of SoFi. Besides, SoFi projects to boost its loan volume to more than $6 billion by the end of 2015.
Mike Cagney, SoFi CEO and co-founder, says: “This funding will dramatically advance expansion of our disruptive products and experiences, and in turn, meaningfully benefit financially responsible individuals”.
By far, it is the second biggest investment made by SoftBank in the fintech industry.
Nikesh Arora, resident & COO of SoftBank says the firm seeks to invest in large industries or geographies that are “ripe for change”.
SoFi is calling it the largest single financing round in the fintech space to date, Reuters says in a report.
Separately, SoftBank said it had raised its stake in USA mobile phone carrier Sprint Corp to 83.19 percent from 81.99 percent, less than two months after its last incremental purchase.
SoFi is unique in its creation of consumer affinity and community.
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SoFi now has more than 400 full-time employees and expects to add at least 100 more by year-end.
