Back in May, Mike Cagney, the CEO of online lender Social Finance, told CNBC’s “Squawk Box” that his company was “profitable and as any private company we want to be opportunistic about when we go public,” adding that, “realistically in the next 12 months, it will happen.”
That plan might have just changed. This morning, SoFi, as the company is commonly called, announced a stunning $1 billion in fresh funding led by the Japanese telecom giant SoftBank.
Earlier investors also joined the Series E round, including Third Point Ventures and affiliates of Third Point LLC; Wellington Management Company; Institutional Venture Partners; RenRen; Baseline Ventures; and DCM Ventures. The company has now raised $1.42 billion altogether.
SoFi initially focused on enabling college alumni to lend money to relatively recent, well-educated college graduates, refinancing their student loans as a next step in the young professionals’ careers. Over the last year, however, the four-and-a-half-year-old company, which now counts more than 400 full-time employees, has expanded into mortgages and personal loans.
That a growing number of online lenders have as well isn’t concerning to investors, seemingly.
As Sandy Miller, a general partner at IVP (whose other online lending bets have included Prosper Marketplace and OnDeck) told me earlier this year, “Online lending is an enormous category; there’s plenty of room [for everyone].”
SoftBank, meanwhile, is known for taking big stakes in growth-stage companies. As president and COO Nikesh Arora told TechCrunch during our Disrupt conference earlier this month, SoftBank explicitly searches for startups with proven business models and then writes them checks of $100 million or more to accelerate their growth.
Said Arora at the show: “We do not want to scale to work with 50 founders. We are looking for 10 to 15 people who will run billion-dollar companies in the future.”