Social Finance or Sofi for short is an up and coming company in the Financial Technology sector or FinTech for short. Sofi is part of the new wave of companies attempting to revolution the financial world by being 100% transparent. Originally focusing on personal and student loans, SoFi quickly grew and now offers a variety of services including banking, savings, money management, crypto investing, and stock investing providing a one stop shop with complete transparency. With SoFi, I never have to worry about fees.
What this mean?
SoFi is going public via SPAC(Special Purpose Acquisition Corp) a method that has exploded in popularity in 2020. Some of the more successful SPACs include Virgin Galactic(SPCE), Open Door Technologies(OPEN), Draftkings(DKNG). With this move SoFi is going to have an estimated value of around 8 Billion dollars. With revenue hitting almost 200 million a quarter in 2020, SoFi has an opportunity to be an amazing long term investment with plenty of room to grow. Currently IPOE, the merger should be completed sometime in the first quarter of this year. While it hasn’t been announced what ticker symbol SoFi will use, I do believe that SOFI is available as a ticker.
SoFi is still in the early stages, but where it differentiates itself from the finance and banking industry is on the technology side. Similar to what Square is doing, SoFi seeks to vertically integrate its mobile applications making it a one stop shop for all your financial needs. In addition SoFi is extremely consumer friendly with a solid stash of articles and activities that promote financial literacy. Think of SoFi as less of a bank and more of a technology and software company.
Here’s how SoFi would compare to other banks in terms of market cap and estimate revenue. Please note that we will be using 2019 revenue numbers as 2020 has not been reported.
Sofi has an amazing mobile app that integrates a variety of services into a single app. As the financial and banking sector become infiltrated by technology companies, namely “disruptive innovation” a phrase I’m taking straight out of Ark’s book, I believe that the companies that will succeed are the ones that are striving for vertical integration. Rather than having to transfer funds around, SoFi allows you to transfer money from to your investing account, purchase crypto without a delay, and even set up loan payments. I believe that the services offered by the couple, when coupled with SoFi’s mission of fee transparency will help draw the younger tech savy generation away from tradition banking institutions. As cash plays an increasing smaller role in the day to day transactions, SoFi is in prime position to capture market share.
Should you Invest?
As always, I am not a financial expert or adviser and these opinions are solely my own. With that being said I am a #SoFi_Ambassador and currently own a small position in IPOE, the SPAC that will merge into SoFi. If you like to begin investing please check out Robinhood, a commission free trading platform that is consumer friendly. By using my referral link to signup, you will be supporting my work.