SoftBank leads $1b round for Renren-backed US online lender
Japanese technology giant SoftBank Group has led a $1 billion Series E round of funding for Social Finance (SoFi), a Silicon Valley online lending marketplace also backed by China social networking site Renren.
It is believed to be the largest ever financing round in financial technology space, and brings SoFi's total funding to $1.42 billion.
Existing investors participating in the deal included Third Point ventures, Wellington Management Company, Institutional Venture Partners, Renren, Baseline Ventures, DCM Ventures and others. Renren participated in a $77.2 million Series B round for SoFi in 2012.
The comapny started out as a student loans marketplace for lenders and borrowers. It subsequently expanded into mortgages, mortgage refinancing, and personal loans. SoFi has been profitable since last year. It claims to have facilitated more than $4 billion in loans to date and the total is expected to surpass $6 billion by the end of this year.
The new capital will be used to develop products, expand services and make additional hires.
"SoftBank seeks to invest in large industries or geographies that are ripe for change," Nikesh Arora, president and COO of SoftBank, said in a statement. "This investment gives SoftBank exposure to the financial services sector, which is one of the largest and most important industries in the world. SoFi is clearly a game changer in the fintech space."
Arora, who was named as COO in SoftBank in May, invested JPY60 billion ($482 million) in the firm in a personal stock market transaction two months ago. He has overseen a number of high-profile investments in Asia's technology sector during his time at Softbank, including a $600 million round for China's Kuaidi Dache in January and a $90 million round for India's Housing.com in December.
US-listed Renren received a going-private offer from its management in July. Led by founder and CEO Joseph Chen, Renren is trying to revolutionize its business by investing in start-ups far removed from social networking and games. Most of the targets are in the US.
In addition to SoFi, the company has invested in US mortgage marketplace LendingHome, stock trading site Motif and real estate crowdfunding platform Fundraise.
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