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Not to be confused with the eponymous US non-profit organization Social Finance (US non-profit organization), its UK counterpart Social Finance Ltd., or with non-profit organization RSF Social Finance, also based in San Francisco.
Social Finance Inc (SoFi)
Industry Financial services
Founded August 2011 (2011-08)
Headquarters San Francisco, California
Key people
Mike Cagney (CEO)
Nino Fanlo (CFO)
Joanne Bradford (COO)
Rob Lavet (General Counsel)
Kevin Moss (Chief Risk Officer)
June Oh (CTO)
Products Student loan refinancing
Personal loans
Parent loans
Wealth management

Social Finance, Inc. (commonly known as SoFi) is an online personal finance company that provides student loan refinancing, mortgages and personal loans. The company is also branching into other financial services, with a wealth management tool in beta. SoFi’s primary customers are early stage professionals. Some of its products, such as parent loans and mortgages, are popular with a broader demographic.


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. By leveraging the interest fellow alumni have in seeing graduates of their alma mater be successful, 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 the founders’ alma mater – the Stanford Graduate School of Business. For this pilot, 40 alumni invested an average of $50,000 to 100 students.[2][3][4]

In September 2012, SoFi raised $77.2 million, led by Baseline Ventures, with participation from DCM and Renren.[5][6] Mark Cuban passed up on investing in the company.

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 January 2016, SoFi surpassed $7 billion in outstanding loan volume.

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]


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.[24] 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.[25]

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 a proprietary underwriting model that examines free cash flow, professional history and education in addition to a history of responsible bill payment to evaluate its borrowers.[26]

In addition to competitive interest rates, SoFi offers 'community' benefits to its borrowers such as career services and startup mentoring.


  1. ^ "SoFi Tapping Alumni to Help With Student Loans". The New York Times. 3 April 2012. 
  2. ^ "SoFi Tapping Alumni to Help With Student Loans". The New York Times. 3 April 2012. 
  3. ^ "SoFi's New Take on $1 Trillion Student Loan Market". Forbes. 2 April 2012. 
  4. ^ "Student Loans: For a Great Deal, Borrow from Alumni". Time. 2 April 2012. 
  5. ^ "Social Finance Lands $77M From Baseline, Renren To Help Solve The Student Debt Crisis". TechCrunch. 11 September 2012. 
  6. ^ "Student-Loan Online Start-Up Gets Financing". The Wall Street Journal. 11 September 2012. 
  7. ^ "SoFi raises $500M to fix the broken student loan market". VentureBeat. 2 October 2013. 
  8. ^ "SoFi Gets $60M in Loan Funding from Morgan Stanley". American Banker. 26 March 2013. 
  9. ^ "MBA Lender seeks to securitize student debt". The Financial Times. 26 March 2013. 
  10. ^ "SoFi gets an additional $41M to keep students from falling into debt". 4 June 2013. 
  11. ^ "SoFi Adding Leverage For Their Alumni Investors". Lend Academy. 24 September 2013. 
  12. ^ "Barclays Helps Startup Structure First Rated P2P Bond". Bloomberg. 14 November 2013. 
  13. ^ "SoFi $80m fundraising paves way for growth beyond student loans". The Financial Times. 3 April 2014. 
  14. ^ "Student loan startup SoFi raises $200 million in Series D round". San Francisco Business Journal. 3 February 2015. 
  15. ^ "Alternative Lender SoFi Expands into Personal Loans". American Banker. 17 February 2015. 
  16. ^ "SoFi CEO Sees $4 Billion of Loans as Startup Seeks Mortgages". Bloomberg. 10 March 2015. 
  17. ^ "SoFi's alternative mortgage". CNBC. 7 October 2014. 
  18. ^ "What do rising rates mean for online lenders?". CNBC. 1 April 2015. 
  19. ^ "SoftBank Makes $1 Billion Fintech Bet With SoFi Investment". WSJ. 30 September 2015. 
  20. ^ "A startup out to displace Wall Street banks just hired ex-SEC chairman Arthur Levitt". Business Insider. 9 September 2015. 
  21. ^ Demos, Telis; Rudegeair, Peter (2016-05-21). "Online Lender SoFi's Bond Deal Receives Highest Moody's Rating". Wall Street Journal. ISSN 0099-9660. Retrieved 2016-10-11. 
  22. ^ Berman, Jillian. "Student loan help could be coming to your job soon". MarketWatch. Retrieved 2016-10-11. 
  23. ^ "Great Rates. Great Benefits l SoFi". SoFi. Retrieved 2016-10-11. 
  24. ^ "A new way to crowdsource your student loans". MSN Money. 26 July 2013. 
  25. ^ "Harvard Graduates Targeted by Alumni-Backed Loan Funds". Bloomberg. 11 December 2012. 
  26. ^ Clements, Nick. "5 Reasons New Lenders Are Ignoring FICO Credit Scores". Forbes. Retrieved 2016-10-11. 

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