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Social Finance, Inc. (SoFi)
IndustryPersonal finance, Software
FoundedAugust 2011; 9 years ago (2011-08)
FoundersMike Cagney
Dan Macklin
James Finnigan
Ian Brady
Key people
Anthony Noto (CEO & Director)
ProductsStudent loans
Home loans
Personal loans
Wealth management
RevenueIncrease US$547 million (2018)
Increase US$126 million (2018)
Number of employees
1,383 (2019)

Social Finance, Inc. (commonly known as SoFi) is an American online personal finance company. A mobile-first service based in San Francisco, SoFi provides a suite of financial products that includes student loan refinancing, mortgages, personal loans, credit card, investing and banking through both their mobile app and desktop interfaces.



SoFi was founded in 2011 by Mike Cagney, Dan Macklin, James Finnigan, and Ian Brady, four students who met at the Stanford Graduate School of Business. The founders hoped SoFi could provide more affordable options for those taking on debt to fund their education.[1] The company's inaugural loan program was a $2 million pilot at Stanford. For this pilot, 40 alumni invested an average of $20,000 to 100 students.[1][2][3]

In September 2012, SoFi raised $77.2 million, led by Baseline Ventures, with participation from DCM and Renren.[4][5] Additional investors included Ron Suber.[6]

On October 2, 2013, SoFi announced that it had raised $500 million in debt and equity to fund and refinance student loans. This total funding amount came from $90 million in equity, $151 million in debt, and $200 million in bank participations, with the remaining capital from alumni and community investors.[7] The $151 million in debt includes a $60 million line of credit from Morgan Stanley, and a $41 million line of credit from Bancorp.[8][9][10]

As of September 2013, SoFi had funded $200 million in loans to 2500 borrowers at the company's 100 eligible schools.[11]

In November 2013, SoFi announced a deal with Barclays and Morgan Stanley to create a bond backed by peer-to-peer student loans, and this would create the first securitization of these loans to receive a credit rating.[12]


In April 2014, SoFi raised $80 million in a Series C round led by Discovery Capital Management with participation from Peter Thiel, Wicklow Capital, and existing investors. Money was raised to expand the footprint of the company's student loan refinancing business and to extend into new products like mortgages and personal loans.[13]

In February 2015, the company announced a $200 million funding round led by Third Point Management. That same month, the company officially began offering personal loans.[14][15] By March 2015, the company was offering mortgages in more than 20 states, up from its initial launch that included under ten states in October, 2014.[16][17] By April 2015, the company had funded more than $2 billion in loans, including student loan refinancing, mortgages, personal loans and MBA loans. To celebrate its $2 billion milestone, SoFi announced a contest, #2BillionTogether, to pay off one of its members student loans.[18] In September 2015, Former SEC Chairman Arthur Levitt was added as an advisor. The firm also raised a $1 billion round of investment from SoftBank[19] and said it had funded $4 billion in loans.[20]

In May 2016, SoFi became the first startup online lender to receive a triple-A rating from Moody's.[21] In September 2016, SoFi launched SoFi at Work, an employee benefit program to reduce student debt and build financial wellness, and announced it has more than 600 corporate partners.[22] As of October 2016, SoFi has funded more than $12 billion in total loan volume and has 175,000 members.[23] In February 2017, it was announced that Social Finance Inc. raised an additional $500 million from an investor group led by Silver Lake, and also including SoftBank, to help support global expansion.[24][25]

On September 11, 2017, Chief Executive Mike Cagney announced he would resign by the end of year due to allegations of sexual harassment and skirting risk and compliance controls.[26] Announced January 23, 2018, Anthony Noto resigned from his position as COO of Twitter, to become the CEO of Social Finance.[27][28] In April 2018, SoFi announced that Michelle Gil, who previously worked at TPG and Goldman Sachs, was joining the company as Chief Financial Officer.[29]

In October 2018, SoFi settled FTC charges, agreeing to stop making false claims about savings from student loan refinancing. The FTC alleged that SoFi had been making such false claims since April 2016.[30] In February 2019, the FTC announced its approval of the final consent order under which SoFI is prohibited from misrepresenting to consumers how much money consumers will save or have saved using its products and from making any claims about any such savings unless the claims are backed up with reliable evidence.[31] The order expires on February 22, 2039, or 20 years from the Commission's most recent date of filing a complaint in federal court reporting any misconduct that occurs later.[32]


In May 2019, SoFi closed $500 million in a single funding round led by Qatar Investment Authority.[33] In September 2019, SoFi inked a 20-year deal with the Los Angeles Rams and the Los Angeles Chargers of the National Football League (NFL) for the naming rights to SoFi Stadium, in Inglewood, California.[34] The deal, which is worth $30 million annually, is a record for any naming rights for a sports venue.[35]


In April 2020, SoFi acquired Salt Lake City payments firm Galileo for $1.2 billion in stock and cash,[36][37] and Hong Kong-based investment app 8 Securities.[38]


SoFi announced they will be merging with a SPAC in order to go public at a $9 billion dollar valuation at the end of the first quarter of 2021.[39][40]


SoFi originally utilized an alumni-funded lending model that connected students and recent graduates with alumni and institutional investors via school specific student loan funds.[41] Investors received a financial return and borrowers received rates lower than the federal government offered. The company sought to minimize defaults by focusing on low-risk students and graduates.[42]

As SoFi's product offerings expanded to include mortgages, mortgage refinancing and personal loans, the company moved away from an alumni-funded model to a non-traditional underwriting approach focused on lending to financially responsible individuals. SoFi uses an underwriting model that examines free cash flow, professional history and education in addition to a history of responsible bill payment to evaluate its borrowers.[43]

They also offer cash management (checking) accounts and an investment platform that includes brokerage and robo-advisor services.



Personal loans, student loans, home loans, and loan refinancing are all part of SoFi's lending services.[44] With over $6 billion dollars in loans issued, SoFi has become one of the largest marketplace lenders.[45] They continue to maintain a policy of no fees for their loans, aside from the interest.

Stock and ETF trading[edit]

In 2018 SoFi introduced commission and fee-free trades of stocks and exchange-traded funds.[46] SoFi Wealth has $202,928,981 under management as of September 2020.[47] Services offered also include traditional IRA, Roth IRA, and SEP IRA retirement accounts.[48]

Cryptocurrency trading[edit]

In February 2019, SoFi announced they'd be partnering with Coinbase to offer cryptocurrency trading.[49][50] SoFi offers trading of Bitcoin, Ethereum, and Litecoin to users in every U.S states apart from Nevada.[51] Cryptocurrency transactions are one of SoFi's only products that have fees, currently set at a 1.25% markup.[52]


SoFi currently offers an online cash management account that acts as a hybrid checking/savings account. They achieve FDIC insurance through their partner banks: MetaBank, Hills Bank and Trust Company, EagleBank, East West Bank, Tristate Bank Capital Bank, and Wells Fargo.[53] In October 2020, it was reported that SoFi had received approval from the OCC to obtain a United States banking license, with a spokesperson from the company stating they "look forward to continuing to work with the OCC on the next steps of the application process, along with the Fed and FDIC."[54]

In July 2020, SoFi announced a partnership with Samsung Pay to launch Samsung Money by SoFi, a cash management checking/savings accounts, with a digital and physical debit card.[55][56] The product has been compared in the media to Samsung's version of Apple Pay.

SoFi announced in late 2020 that it was launching its first-ever credit card, which intends to incentivize healthy financial habits. The card is being released to limited batches of SoFi members, and interested individuals can join their waitlist. The Credit Card is issued by the Bank of Missouri and leverages the global payments network of Mastercard, allowing SoFi Credit Card holders access to Mastercard's Benefits program.[57][58]

Credit Score Monitoring & Budgeting Tool[edit]

Available to anyone who registers a free SoFi account is SoFi Relay. The service allows users to track their money in bank, credit card, investment, and loan balances and transactions through a single user interface, as well as set financial goals. No-cost credit score tracking with weekly updates is provided through TransUnion.[59]


  1. ^ a b "SoFi Tapping Alumni to Help With Student Loans". The New York Times. 3 April 2012.
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  3. ^ "Student Loans: For a Great Deal, Borrow from Alumni". Time. 2 April 2012.
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  5. ^ "Student-Loan Online Start-Up Gets Financing". The Wall Street Journal. 11 September 2012.
  6. ^
  7. ^ "SoFi raises $500M to fix the broken student loan market". VentureBeat. 2 October 2013.
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External links[edit]