FintechMortgagePolitics & Money

SoFi raises $500 million more in funding as Qatar buys in

New investment values online lender at $4.3 billion

SoFi is no stranger to raising money, as the online lender has raised nearly $2 billion over the last few years.

The company’s investors are a disparate group that include one of Japan’s largest and most prominent investors, SoftBank Group, as well as a number of U.S. investors like Silver Lake, Third Point Ventures, GPI Capital, and more.

And now, SoFi is broadening its investor base even more.

The online lender announced Wednesday that it raised more than $500 million in equity financing led by Qatar Investment Authority, the sovereign wealth fund of Qatar.

Other participants in the funding round include previous investors as well as SoFi CEO Anthony Noto, who joined the company last year.

According to SoFi, the latest funding values the company at $4.3 billion.

The company said that the new funding brings its total capital to $2.3 billion.

SoFi said that it plans to use the new money to “continue to invest in its rapid rate of innovation and growth.”

Part of what SoFi may use the money for is the naming rights to the new NFL stadium in Southern California. According to Bloomberg, SoFi is currently negotiating to buy the naming rights for the new Inglewood stadium, which will be home of the Los Angeles Rams and Los Angeles Chargers.

According to the report, SoFi would likely pay $20 million per year for 20 years for the naming rights. The move would echo Quicken Loansmove to secure the naming rights for the Cleveland Cavaliers’ stadium.

The move to partner with the NFL would be somewhat natural for Noto, given his previous experience working for the league. Noto was chief financial officer of the NFL in the early 2000s.

Noto replaced Mike Cagney, who abruptly resigned as CEO back in September 2017 with the company embroiled in controversy surrounding sexual harassment allegations.

Over the last few years, SoFi transitioned from specializing in student loans into becoming one of the largest online residential mortgage retailers.

In 2016, SoFi shook up the mortgage business when it announced a partnership with Fannie Mae, which included a new loan option that allows homeowners to refinance their mortgage at a lower rate and pay down the balance of an existing student loan.

A few years ago, SoFi announced its intentions to break into banking by applying for a bank charter under the name SoFi Bank in Utah.

That move was met by resistance from other banks and members of Congress, but the plan was abandoned, after Cagney stepped down amid complaints about sexual harassment at the company.

But with Noto on board, the company has secured another $500+ million in funding.

“Over the last year, we’ve worked aggressively to grow SoFi from a desktop lending business to a broad-based, mobile-first financial platform enabling members to borrow, save, spend, invest and protect their money,” Noto said. “We’re thrilled to have QIA as a new investor and partner in our journey to help our members Get Their Money Right.”

QIA CEO Mansoor Al-Mahmoud said the company is proud to invest in SoFi.

“We strongly believe in SoFi’s approach, and their dedication to build a transformational financial platform that is rapidly disrupting consumer finance,” Al-Mahmoud said. “SoFi’s team have a clear long-term vision for their business, and we're proud to be their partners and to support them on their journey as part of our broader strategic investments in technology.”

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