SoFi shares are up 12% in their first day of trading. Here's the inside scoop from CEO Anthony Noto on why a SPAC made sense for the fintech.
- SoFi shares began trading Tuesday, marking the culmination of a SPAC deal that raised $2.4 billion.
- SoFi CEO Anthony Noto told Insider going public was a goal from the day he joined the startup in 2018.
- SoFi merged with Social Capital Hedosophia Corp V, a blank check company led by Chamath Palihapitiya.
- See more stories on Insider’s business page.
When Anthony Noto joined SoFi from Twitter more than three years ago to serve as the personal finance startup’s CEO, he arrived with three goals in mind.
In addition to focusing on the quality — not quantity — of loans and developing mobile offerings, Noto told SoFi’s board in December 2017 he wanted to establish a stable, high-performing executive team while leading the company to the public markets
On Tuesday, that became a reality when SoFi began trading publicly on Nasdaq after the completion of its merger with Social Capital Hedosophia Corp V, a special purpose acquisition company backed by Chamath Palihapitiya.
“We have blitzscaled every day and every minute that we’ve been here, and that’s how we’ve gotten here first. And quite frankly, that’s built a foundation of our company and our competitive advantage,” Noto told Insider, referencing LinkedIn cofounder Reed Hoffman’s mantra of building a product or company both broadly and quickly.
SoFi’s stock closed up more than 12% on Tuesday at $22.65 a share.
While going public is a significant milestone for any company, it’s a particularly big one for Noto, who took the plunge to join SoFi when the startup was at arguably its lowest point.
SoFi’s cofounder and former CEO Mike Cagney resigned from the company in 2017 following accusations of sexual harassment.
“I think Anthony truly changed the culture of the company,” said David Chao, cofounder and general partner at DCM, a venture capital firm and early SoFi investor. Chao helped with the recruitment process for finding Noto to take over as SoFi’s CEO, which he did in February 2018.
When asked if he has kept in touch with SoFi’s founding team, Noto answered simply: “Not at all.”
Noto brought to SoFi both a background in tech (he came from Twitter, where he was CFO), as well as banking (he led the TMT group at Goldman Sachs before decamping for Silicon Valley). It was at Goldman, Noto said, that he “had a front row seat” to the changes in mobile tech sweeping across industries.
As for his other priorities, SoFi has built out a sweeping range of new features in the past two years.
Most recently, it began offering its customers access to pre-market IPO shares, a move also made by competitor Robinhood. In March, SoFi announced the wholesale acquisition of Golden Pacific Bancorp, the Wall Street Journal reported, as the startup looks to successfully obtain a US banking charter. Also this year, SoFi launched a credit-card product in partnership with Mastercard.
Palihapitiya’s blank-check company first debuted in October. In early January, SoFi and Palihapitiya confirmed the impending merger between the two entities, and last Thursday, the deal was approved by shareholders ahead of shares beginning to trade Tuesday.
“We originally were doing a private investment raise, and as we started to get feedback on that and the interest of investors more broadly — and thinking about our capital needs — it evolved into really a three-pronged deal,” Noto said.
That deal involved a private investment in SoFi in December by T. Rowe Price, a $1.2 billion PIPE deal led by Palihapitiya, and the SPAC itself.
“Often it’s the case that I take out that presentation that I created for the board in December of ’17 and showed it to people I was recruiting in the beginning. It was ideas on paper. A year ago, it was 80% accomplished. Now, everything I laid out on paper, we’re well past,” Noto said.
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