Cagney was previously the CEO of SoFi; his new venture focuses on home equity loans using blockchain to make the...
The company securitized $2.6 billion in Q1 2018, representing a 35% increase over the prior year period; three transactions took place, two student loan deals and one consumer loan deal; medical residency loans were included for the first time in SoFi 2018-B Notes; SoFi is a top-ten ABS sponsor, coming in at seventh. Source
SoFi has already done two Super Bowl commercials but has also become a sponsor of numerous sporting events; The company most recently sponsored the Big Ten men’s college basketball championship final last week; SoFi finds that sporting events are a great way to reach their target audience and build the SoFi brand. Source
Digital only banking startups are finding it hard to scale as their offerings are similar to incumbent banks but with some better tech; with the amount of companies starting to increase these banks should think of focusing on a particular niche to get greater traction says Satya Patel, a partner at VC firm Homebrew; customer acquisition costs and a viable revenue model are two of the biggest barriers for companies; online lenders like SoFi have started to offer banking services on top of lending as a means to offer customers more products after providing an initial service. Source.
SoFi said it missed their internal 4th quarter earnings projections due to lower than expected loan performance, increased hiring costs and expenses related to management changes according to the WSJ; the company also said they expect the loan performance trend to continue into 2018 as the look to refine their credit model; the company is also looking to improve fraud prevention, automate loan processing and get better at collections. Source.
Deposit accounts and debit cards will be available to some customers next month according to SoFi; the account will function like a checking account that will earn interest; the company recently shared that they were working with WSFS Financial Corp for the new product called SoFi Money. Source
In 2017, SoFi spent $170 million on marketing and paid $756 to acquire each customer; in 2018 the company plans to spend $200 million; in comparison LendingClub and Prosper spent between $350-$450 to acquire a customer; back in 2015, SoFi spent $30 million on marketing and $375 to acquire a customer; at the time marketing spend as a percentage of originations was 0.6%; SoFi’s marketing strategy is different than other fintech firms who often show up on rate comparison sites. Source
Anthony Noto was interviewed on his first day at SoFi; Noto shared that before he makes any changes at SoFi he wants to understand how various leaders are thinking about opportunities and risks; he also touched on corporate culture and strategic focuses in the interview; when asked about a potential IPO Noto said, “We don’t have any specific timetable or commitment to do that, but it something that we think could be possible down the road.”; American Banker also reported that SoFi’s wealth management business has $44.7 million of assets under management across 10,000 accounts. Source
In this week’s PeerIQ Industry Update they cover the recent rebound of equity markets after a volatile few weeks, regulatory news and a deep dive on fintech M&A; OnDeck announced they had reached GAAP profitability and it was reported that SoFi missed their internal targets; PeerIQ takes a deep dive on why banks should buy online lenders; some of the key reasons inclined ROE potential for the banks and to avoid potentially losing market share to big tech firms who might enter the space in the next few years. Source.
Overstock has been building out their FinanceHub for the past few months to include Overstock credit cards and insurance products, loans by LendingTree, Prosper and SoFi, a robo-adviser for automated investing and a discounted trading platform; Raj Karkara, Overstock VP of loyalty and financial services, tells TearSheet, “Consumers don’t want to sit and sign 50 documents, they just want to go online and get through the steps they need to take to move forward.”; the moves made are part of a broader strategy for the retailer to become a full service fintech firm that caters to their clients needs. Source.