# SoFi

SoFi Technologies, Inc. (abbreviated as SoFi) is an American personal finance and financial technology company. Founded in 2011 at Stanford University, it operates as a direct bank and supports other financial institutions through its technology platform. As of 2024, SoFi reports 10.1 million customers and 168 million platform accounts.
In its early years, SoFi focused on providing student loans, using data science to assess risk and offer borrowers lower interest rates. Over time, the company expanded its offerings to include mortgages, personal loans, auto loans, credit cards, stock investing, insurance, estate planning and bank accounts, ultimately obtaining a U.S. bank charter. SoFi also made acquisitions and began supporting other financial institutions through its technology platform in this period.

## History
### 2011–2013: Founding and early years

SoFi, short for Social Finance, was founded at Stanford University in the Fall of 2011. The founders were 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. The company's inaugural loan program was a pilot at Stanford; for this pilot program, 40 alumni loaned about $2 million to approximately 100 students, for an average of $20,000 per student.
In September 2012, SoFi raised $77.2 million, led by Baseline Ventures, with participation from DCM and Renren. Additional investors included Ron Suber.
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. The $151 million in debt includes a $60 million line of credit from Morgan Stanley, and a $41 million line of credit from Bancorp.
As of September 2013, SoFi had funded $200 million in loans to 2500 borrowers at the company's 100 eligible schools.
In November 2013, SoFi announced a deal with Barclays and Morgan Stanley to create a bond backed by peer-to-peer student loans, which would create the first securitization of these loans to receive a credit rating.

### 2014–2018: Expansion, challenges, FTC charges

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.
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. 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. 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. 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 and said it had funded $4 billion in loans.
In May 2016, SoFi became the first startup online lender to receive a triple-A rating from Moody's. 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. As of October 2016, SoFi has funded more than $12 billion in total loan volume and has 175,000 members. In February 2017, it was announced that SoFi raised an additional $500 million from an investor group led by Silver Lake, and also including SoftBank, to help support global expansion. In May 2017, Reuters reported that SoFi had launched a new online wealth management service, and referenced the company as "one of the largest online lenders" in the U.S.
On September 11, 2017, CEO Mike Cagney announced he would resign by the end of year due to allegations of sexual harassment and skirting risk and compliance controls. Announced January 23, 2018, Anthony Noto resigned from his position as COO of Twitter, to become the CEO of SoFi. In April 2018, SoFi announced that Michelle Gill, who previously worked at TPG and Goldman Sachs, was joining the company as Chief Financial Officer.
In October 2018, SoFi settled Federal Trade Commission (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. 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. 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.

### 2019–2024: Going public and diversification

In May 2019, SoFi closed $500 million in a single funding round led by Qatar Investment Authority. In September 2019, SoFi signed 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. The deal, which is worth $30 million annually, is a record for any naming rights for a sports venue. In April 2020, SoFi acquired Salt Lake City-based financial services API and payments platform "Galileo" for $1.2 billion in stock and cash, and Hong Kong–based investment app "8 Securities". SoFi went public through a merger with a special-purpose acquisition company (SPAC) backed by Chamath Palihapitiya raising up to $2.4 billion at a $9 billion valuation. It began trading on the Nasdaq under the ticker symbol SOFI on June 1, 2021.
In January 2022, SoFi received approval from the Office of the Comptroller of the Currency (OCC) for a national bank charter. In February 2022, SoFi purchased Golden Pacific Bancorp, owner of Sacramento, California based Golden Pacific Bank, for $22.3 million. This allowed SoFi to hold loans for investment as opposed to selling them to outside investors, and allowed it to obtain the bank charter from the OCC. In March, SoFi acquired Technisys, a cloud-based banking system, for $1.1 billion.
In 2023, SoFi was named as one of the World's Most Innovative Companies by Fast Company in March and one of the World's Top Fintech Companies by CNBC in August. In January, the company was quoted to claim nearly 6% market share in the U.S. personal loans business. Later, by March, it had reached over $10B in total deposits. The same month, SoFi sued the Biden administration to block the pause on student loan repayment, saying it was hurting its business. SoFi dropped the lawsuit three months later, after a debt ceiling deal had been signed into law which provided a clear timeline for the resumption of student loan repayments. In April 2023, the company announced it had acquired Wyndham Capital Mortgage in an all-cash deal. According to American Banker in July 2023, SoFi had an estimated 60% share in the U.S. student loan refinancing market. By December 2023, the company reportedly had a 9.5% market share in "unsecured lending within a specific credit box" and a 0.1% share in the home loan market in the U.S.
In April 2024, a CNN study recognized SoFi as the "best student loan refinance lender". The study highlighted SoFi's competitive rates, flexible terms, and various perks. However, it also noted areas for improvement, specifically in disclosing the minimum credit score requirement and offering a cosigner release option for refinance loans. During the same month, another study cited SoFi's auto repair loans as the "best for customer benefits," while also noting some downsides, including a high credit score requirement, a minimum loan amount of over $5,000, lack of disclosure on the minimum income requirement, and limited nationwide availability.
In May 2024, SoFi was fined $1,100,000 for creating a cash management brokerage account system that people subsequently used to fraudulently withdraw funds from accounts that did not belong to them by using stolen identities or fake identification. SoFi was found to have failed to set up proper safeguards to prevent this from happening. Around 800 of these accounts were opened, and were used to transfer some $8.6 million from other people's customer accounts. That same month, CNN cited SoFi as the "best online personal loan" provider. The lender was stated as offering "larger loan amounts than most competitors" while not asking to pay origination fees. Separately, SoFi was called the "best for investors who want a one-stop shop for all their money needs". The company was said to offer "competitive rates" in savings and checking accounts and "free access to professional financial advisors who do not sell products" and must provide advice in line with the best interests of SoFi's customers.
In August 2024, both CBS News and USA Today ranked SoFi as the "best overall" provider of personal loans. The company was said to be able to lend money on the same day as approval for a majority of the approved applications. Separately, SoFi's personal loans were cited as the "best for long repayment terms" and were noted for offering repayment periods up to 84 months and loan amounts up to $100,000. The personal loans were also recognized as the "best for refinancing high-interest debt". In the following month, SoFi's mortgage lending was cited as the "best for saving money", noted for the discounts it offered.
In October 2024, SoFi's Form 8-K for July-September 2024, filed with the U.S. Securities and Exchange Commission, stated that the number of SoFi members (customers) was nearly 9.4 million and that the company's "technology platform enabled accounts" numbered 160 million. For the year ended December 31, 2024, the company announced the figures of $2.67 billion in revenue and $498.67 million in net income, and said that it had nearly 5,000 employees, $36.25 billion in total assets and $6.53 billion in total equity. It also stated that its technology platform-enabled accounts and total members (customers) reached 168 million and exceeded 10.1 million, respectively.

## Business model

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. 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, using data science to determine risk and offer borrowers a lower rate.
As SoFi's offerings expanded to include mortgages, mortgage refinancing, personal loans, auto loans, credit cards, stock investing, insurance, estate planning and bank accounts, the company placed focus on digital banking methods, without operating physical branches. As of 2024, it operates as a personal finance company as well as a fintech company, and comprises three divisions: lending, technology platform and financial services. The lending division, SoFi's largest source of revenue as of 2023, generates income from net interest, securitization sales, and whole loan sales. The technology platform division generates income via Galileo's customer services, including platform access and card management services, offered in form of APIs. The financial services division generates income from transaction and management fees, share lending, and other sources.

## Products
### Lending

Personal loans, student loans, home loans, and loan refinancing are all part of SoFi's lending services. In 2015, four years after its launch, SoFi had over $6 billion in loans issued, becoming one of the largest marketplace lenders. They continue to maintain a policy of no fees for their loans, aside from the interest.

### Stock investing

In 2018, SoFi introduced commission and fee-free trades of stocks and exchange-traded funds under the name SoFi Invest (formerly SoFi Wealth). This service is now called SoFi Active investing.
As of December 2023, SoFi's assets for the fiscal year totaled $27.98 billion. Services offered also include traditional IRA, Roth IRA, and SEP IRA retirement accounts.

### Cryptocurrency trading (closed in 2023)

In February 2019, SoFi launched a partnership with Coinbase to offer cryptocurrency trading, offering trading of Bitcoin, Ethereum, Litecoin, and more than 17 other crypto assets to users in every U.S state apart from Hawaii, New Jersey, and West Virginia. Cryptocurrency transactions were one of SoFi's only products that have fees. In December 2023, SoFi shuttered its cryptocurrency services.

### Bank accounts and credit cards

SoFi offers a high-yield checking/savings account with no fees that is backed by the FDIC. Their cash management (checking) accounts and investment platform include brokerage and robo-advisor services. In July 2020, SoFi launched a partnership with Samsung Pay to launch Samsung Money by SoFi, a cash management checking/savings accounts, with a digital and physical debit card. In late 2020, SoFi launched its first-ever credit card. In 2022, SoFi launched SoFi Money under SoFi Bank, a checking and savings account. The previous cash management account was deprecated to pay zero percent interest, which caused controversy.

### Online tools

SoFi Relay, a credit score monitoring and budgeting tool, is available to anyone who registers a free SoFi account. The service allows users to track their money in bank, credit card, investment, and loan balances and transactions as well as set financial goals. No-cost credit score tracking with weekly updates is provided through TransUnion. In August 2023, SoFi began integrating Galileo Financial Technologies' conversational AI engine into its personal finance application.

### Insurance

SoFi has partnered with several third party insurance companies, such as Lemonade, Inc., in order to offer life insurance, auto insurance, homeowners insurance, and renters insurance.

### Banking technology platform

SoFi is a provider of digital banking software to multiple banks and fintech brands in the U.S. and Latin America. The company also provides API access to its technology platform, supporting banks in processing credit card payments and helping businesses launch financial services.