The news reveals CEO Anthony Noto‘s aspirations to go public after he succeeded SoFi Co-Founder Mike Cagney in 2018. Last year, Noto had said going public was a long-term plan but not a priority. Noto is an ex-Goldman Sachs investment banker.
SoFi was valued at $4.8 billion in a private fundraising round last year, and the company has talked with multiple special purpose acquisition companies (SPACs), according to unnamed sources cited by Reuters.
The company was founded in 2011 and has worked to capitalize on banks’ reduced focus on lending after the late 2000s financial crisis, working on refinancing student loans early on and has since also worked on mortgages and personal loans, according to Reuters. It has also begun work in stock trading and cash management accounts.
In October, SoFi said it had received preliminary and conditional approval from the U.S. Office of the Comptroller of the Currency for its application for a national bank charter.
SPACs, or shell companies created solely for the purpose of helping startups go public, have emerged as a primary way for companies to invest. There have been 208 SPACs raising over $70 billion this year so far, Reuters reported, quoting SPAC Research, with some companies doing so including United Wholesale Mortgage and Finance of America.
In May, Noto said SoFi’s investor accounts had doubled in large part due to fractional shares, even in spite of how volatile the markets have been. Noto said some people “absolutely need” to repair their finances and “build for the future,” so they are working with SoFi. Because of the pandemic, he said, younger people have begun investing, seeing the market downturns as an opportunity.