Written by: Mark Calvey
Reprinted from the San Francisco Business Times
SoFi said Wednesday that it raised $1 billion in a round led by SoftBank , marking fintech's biggest financing round ever.
Yes. Fintech has arrived.
The huge financing round is turning heads and will spur more entrepreneurs and venture capitalists to look for opportunities in fintech, a sector that stock-market pundits back East still see as an "interesting experiment."
SoftBank is clearly enthusiastic about the burgeoning fintech sector that's reshaping how Americans lend, pay and invest.
"SoFi is clearly a game changer in the fintech space," Nikesh Arora , SoftBank's president and chief operating officer. "SoftBank seeks to invest in large industries or geographies that are ripe for change. This investment gives SoftBank exposure to the financial services sector, which is one of the largest and most important industries in the world."
SoFi, with its San Francisco headquarters in the Presidio, has big plans for the money.
It said it will use some of the $1 billion they just raised to "broadly expand" its menu of financial services offered to its borrowers.
"SoFi continues to redefine consumer expectations in financial services," said Mike Cagney , SoFi CEO and co-founder. "This funding will dramatically advance expansion of our disruptive products and experiences, and in turn, meaningfully benefit financially responsible individuals."
"Our trajectory is clear: we are well on our way to becoming the most trusted financial services partner in the U.S.," a confident Cagney said.
In an interview with Bloomberg News , Cagney said: "We're trying to build something really big, really meaningful. SoftBank is telling us, 'Swing for the fence.'"
SoFi was recently featured in a San Francisco Business Times cover story on the ambitious joining the Bay Area's tech gold rush. SoFi said Wednesday that it will boost its 400-count employee base by 25 percent by year-end.
SoFi has raised a total of $1.42 billion in equity and has been profitable since 2014. The company's prior round just closed in February.
In addition to Japan's SoftBank, existing investors also wrote checks in the round include Third Point Ventures, Wellington Management Co., Institutional Venture Partners, RenRen, Baseline Ventures and DCM Ventures.
Here's the Cliff Notes on SoFi's history: Founded in 2011, SoFi pioneered the refinancing of student loans. The startup later expanded into home mortgages and personal loans by focusing on very creditworthy borrowers. SoFi has made more than $4 billion in loans and expects to finish 2015 with more than $6 billion lent since opening its doors.
SoFi received a San Francisco Business Times' Tech & Innovation Award earlier this year .
The lender says banks are eager to lend to borrowers with substantial collateral already, but may overlook those who are generating high incomes but haven't built significant wealth — yet.
"Banks are eager to lend to our clients' parents," Cagney said