This has been a very busy 24 hours in the online lending space. First came word late yesterday that Avant had raised $325 million in new equity funding at around a $2 billion valuation, from such firms as General Atlantic and JP Morgan JPM . Just a few hours ago, Lending Club LC submitted comments and recommendations about its industry to the US Treasury Department, which had put out a request for information back in July. And then there was Credible, a new platform for borrowing and refinancing student loans, raising $10 million in funding led by Lending Club co-founder Soul Htite.
Now, SoFi is announcing that it has raised $1 billion in Series E funding led by SoftBank. It is believed to be the largest-ever equity funding in the financial technology space. The company says it has been profitable for nearly two years, and expects to increase its headcount from 400 to at least 500 by year-end.
San Francisco-based SoFi focuses primarily on student loan refinancing, and says it has loaned over $4 billion to date (including some mortgages and consumer loans). It previously raised $365 million in equity funding, including a $200 million Series D round earlier this year led by Dan Loebs Third Point Ventures at a valuation of around $1.5 billion.
Third Point returned for this deal, as did other existing shareholders like Wellington Management, Institutional Venture Partners, RenRen, Baseline Ventures and DCM Ventures.
We had just done that round of fundraising in January but were growing ahead of expectations so wanted some incremental capital to support a higher pace of growth, says SoFi co-founder and CEO Mike Cagney, who expects the new funding will delay SoFis IPO plans. Ive known [SoftBank founder] Masayoshi Son from a couple of years back and, in classic Masa fashion, he agreed we could use some incremental capital but told me we should take $1 billion. At first we thought it was too much dilution but, we went back to see how acretive this could be by accelerating our expansion plans, that we ultimately felt it made sense. Well do nearly $5 billion in loans this year, and we want to double it next year.
Cagney adds that while approximately 60% of SoFis current loans are for refinancing student debt, he expects new origination in mortgages and consumer loans to top student debt refinancing by December.
SoFi recently announced that it had added former SEC chairman Arthur Levitt as an advisor, and former Pinterest executive Joanne Bradford as chief operating officer.
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