(Reuters) – Online loan startup Social Finance Inc (SoFi) has held talks with Blankoscheck acquisition firms about a deal that would allow it to debut on the stock market, people familiar with the matter said Monday.
The discussions show that the IPO is firmly in the sights of SoFi’s CEO Anthony Noto. Noto, a former investment banker for Goldman Sachs Group Inc and former chief operating officer of Twitter Inc, succeeded SoFi co-founder Mike Cagney, who stepped down in 2018. Noto said last year that the IPO was in the company’s long-term plans but warned it wasn’t a priority.
The San Francisco-based company, valued at $ 4.8 billion in a private fundraising round last year, has held talks with a number of so-called Special Purpose Acquisition Companies (SPACs), the sources said, warning that there is no certainty that an agreement would have been reached.
The sources asked for anonymity as the conversations are confidential. SoFi did not respond to requests for comment.
A SPAC is a shell company that raises funds as part of an IPO with the aim of acquiring a private company, which then goes public through the merger.
SPACs have become one of Wall Street’s most popular investment vehicles in 2020, with 208 SPACs raising more than $ 70 billion so far this year, according to SPAC Research. United Wholesale Mortgage and Finance of America were among the mortgage lenders who agreed to go public through SPACs this year.
Founded in 2011, SoFi benefited from banks laying off large chunks of consumer credit after the 2008 financial crisis. It started with student loan refinancing and expanded to include mortgages and personal loans.
The company announced in October that it had received preliminary conditional approval from the US Department of Auditors for its application for a national banking charter. The company has also expanded into stock trading and cash management accounts.
SoFi has raised over $ 3 billion in capital, according to PitchBook data. Donors include private equity firm Silver Lake and billionaire Peter Thiel.
Reporting by Joshua Franklin in Miami and David French in New York; Editing by Matthew Lewis