Online lender SoFi is losing some of its top brass, as three executives have announced plans to leave the company within weeks.
Chief Marketing Officer Joanne Bradford, Chief of Risk Kevin Moss and Senior VP of Capital Markets Ashish Jain recently announced their plans to step down, according to The Wall Street Journal, which noted that all three had been with SoFi before CEO Anthony Noto took over in early 2018.
Could the executive shuffle be a sign of trouble lurking beneath the surface as the company navigates a tough environment for online lenders?
The WSJ called SoFi “one of the buzziest upstarts to take on big banks,” but pointed out that it has faced its share of challenges in recent years.
“Higher interest rates have made SoFi’s refinanced student loans and personal loans less attractive to some borrowers and contributed to a slowdown in lending volume, hurting SoFi’s financial results,” the WSJ stated. “SoFi sells the bulk of loans it makes to investors, a task made more difficult by rising delinquency rates on credit cards and other consumer loans.”
Sources told the Journal that the company is keeping a larger portion of its loan securitizations on its balance sheet in order to earn more income on residuals and potentially sell them at a higher price.
But the move is not without risks, as SoFi will bear the loss if customers default on payments at a higher-than-expected rate.
In an effort to diversify, the lender is building out other business channels, and it seems to have some real believers.
Just last week it announced a $500 million capital raise led by the sovereign-wealth fund of Qatar, a nice chunk of change to add to the nearly $2 billion it has raised in the last few years.
A spokesperson for SoFi told the Journal that the company has hired 12 executives in as many months as it continues to draw top talent to its team. And, SoFi’s lending business seems to be going strong, as a letter to shareholders reported that first-quarter earnings revealed higher volume and revenue than previous quarters, the Journal reported.
But the loss of Bradford shouldn't be overlooked. As chief marketing officer, Bradford oversaw SoFi's recent nationwide marketing efforts, which included advertising during the Super Bowl multiple times.
Bradford was also the brains behind SoFi's "get a month's worth of avocado toast free with your mortgage" promotion, which set the internet ablaze just over two years ago. And now, Bradford is leaving SoFi behind.
But, as Noto said in a public statement upon the news of the recent capital raise, SoFi is on a mission to expand.
“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.