The Qatar Investment Authority (QIA) has led a more than $500mn equity financing in SoFi, an online lending entity in the US.
The San Francisco-based company plans to use the funds to continue to invest in its rapid rate of innovation and growth, fulfilling its mission to help SoFi members achieve financial independence to realise their ambitions.
The investment round values SoFi at $4.3bn on a ‘pre-money’ basis and further strengthens SoFi’s balance sheet to total capital of $2.3bn. The QIA invested alongside existing investors and SoFi chief executive, Anthony Noto.
"We strongly believe in SoFi’s approach, and their dedication to build a transformational financial platform that is rapidly disrupting consumer finance,” said Mansoor al-Mahmoud, chief executive of the QIA.
Finding that SoFi’s team has a clear long-term vision for their business, he said the QIA is proud to be the partners and support SoFi on its journey as part of the broader strategic investments in technology.
Qatar’s sovereign wealth fund finds immense potential in the technology sector and therefore has been focusing more on its investing in companies in the TMT sector.
“Today’s announcement underlines QIA’s growing focus investing in leading innovators in the TMT sector. The QIA has ambitions to build strong partnerships with technology companies in the US and beyond," al-Mahmoud said.
The transaction is subject to customary closing conditions. Wachtell, Lipton, Rosen and Katz are serving as SoFi’s legal advisor in connection with the transaction. Morgan Stanley is serving as financial adviser and Shearman & Sterling is serving as legal adviser to the QIA.
This announcement follows several key product releases from SoFi since the start of 2019. This includes SoFi Invest, an investment platform inclusive of active investing in stocks and exchange traded funds or ETFs (brokerage); SoFi Money, the features of a checking and savings account in one new account with 2.25% APY (annual percentage yield), no fees, and the ability to spend, save, and pay all from the SoFi mobile app.
SoFi also entered the undergraduate loan business with their private student loans and re-launched their home loans experience earlier this year. The company recently announced that they have over 700,000 members and 7.5mn registered users.
