Shares of SoFi Technologies Inc. are up about 7% in Tuesday’s session, which marks the first day of trading for the shares following the financial technology company’s merger with Social Capital Hedosophia Holdings Corp. V, a special-purpose acquisition company.
The deal assigned a post-money equity value of $8.65 billion to SoFi
which offers a variety of financial-services products like home loans and small-business financing while relying on a digital model.
Chief Executive Anthony Noto argues that the company’s broad suite of products helps differentiate it as SoFi can drive links between different offerings and better serve customers who have diverse financial needs. He said that the company’s offerings work “better together” since SoFi offers rewards points to customers who do things like check the app regularly or read articles through the app. The company also gives holders of its credit card double the points when they redeem those points within the SoFi ecosystem.
The company recently acquired Golden Pacific Bancorp, a small community bank. SoFi expects that the transaction will help speed up its process of getting a bank charter as SoFi can now apply through a “change of control” process, which is thought to be quicker. With a bank charter, Noto anticipates that SoFi will be able to provide better interest rates on checking and savings accounts while lowering its own cost of funding.
SoFi had previously obtained conditional approval from the Office of the Comptroller of the Currency for a bank charter when it filed an original application through a “de novo” process. The company has since refiled the request as a “change of control” application and Noto said that SoFi is also seeking approval from the Federal Reserve.
The company is benefiting from a “secular acceleration” in digital financial services, Noto told MarketWatch Tuesday, as the pandemic made it so people had to conduct their financial business online.