SoFi Lands $5 Billion to Expand Loan Platform Business
SoFi has finalized an agreement with Blue Owl Capital worth at least $5 billion.
The deal with the asset manager, announced Thursday (March 13), will allow SoFi to expand its loan platform business, which refers pre-qualified borrowers to loan origination partners and originates loans on behalf of third parties.
“This represents the largest single commitment for SoFi’s Loan Platform Business and is two times our first commitment, enabling us to help more members get their money right while also diversifying toward less capital-intensive and more fee-based sources of revenue,” Anthony Noto, CEO of SoFi, said in a news release.
“Blue Owl is excited to be partnering with SoFi to help meet the growing needs of customers through their loan platform business,” added Ivan Zinn, head of alternative credit at Blue Owl. “SoFi has been expanding credit access to more people with innovative solutions. We see a strong opportunity in being part of this growth through this strategic program.”
The release noted that the two-year deal with Blue Owl reflects an increasing demand for personal loans from members and debt investors and boosts SoFi’s efforts to diversify revenue streams with less capital-intensive and more fee-based sources.
According to SoFi, the company’s loan platform business originated $2.1 billion in loans last year. This business lets SoFi earn fee income to “originate loans on behalf of partners while retaining servicing rights,” the release added.
Meanwhile, SoFi said earlier this month it had closed a $697.6 million secularization of loan platform business volume.
This transaction was a “co-contributor securitization” with collateral made up primarily of loans previously placed with loan platform business partners, the company said.
“As SoFi’s personal loan products resonate with more and more people, we see continued strong demand for our loans in the capital markets,” Chris Lapointe, SoFi’s finance chief, said in a news release. “This offering demonstrates the clear value of our loan platform business and our diversified funding strategy.”
In related news, PYMNTS wrote last month about efforts by SoFi and other companies like it to capitalize on the ongoing creation of digital financial solutions and products, including cards, to provide consumers an alternative to traditional banks.
“In doing so, and by offering a continuum of financial services,” that report said, these firms “are moving beyond the confines of commerce to become, in essence, banks themselves.”
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