Chamath Palihapitiya speaks at the 23rd Annual Sohn Investment Conference in New York City on April 23, 2018.
Heidi Gutman | The Washington City Times
SoFi, an online financing start-up, will go public by merging with a blank check company run by venture capital investor Chamath Palihapitiya, the companies announced Wednesday.
The merger with Palihapitiya’s SPAC, Social Capital Hedosophia Corp V, will value SoFi at $ 8.65 billion.
SoFi, short for Social Finance, was last valued at $ 5.7 billion in private markets and has raised money from venture capital giants like SoftBank and Peter Thiel, according to PitchBook. Reuters was the first to report the deal.
Special purpose takeover companies, known as SPACs, raise money through a shell company to buy an existing business. It is an increasingly popular way for late venture capital-backed start-ups to get listed quickly in public markets.
Palihapitiya – an early manager at Facebook – disclosed multiple companies through SPACs in late 2019, including Virgin Galactic Holdings. While another blank check company founded by Palihapitiya will merge with Opendoor Labs with SoftBank.
Shares of the SPAC that bought SoFi rose in trading Thursday after the deal was announced.
Founded in 2011 with a focus on student loan refinancing for millennials, SoFi now offers stock and cryptocurrency trading, personal and mortgage loans, and asset management services. The company is run by CEO Anthony Noto, Twitter’s former Chief Operating Officer and former Managing Director at Goldman Sachs, joined SoFi last January.
— The Washington City Times’s Scott Wapner contributed to the reporting.