Fintech firm SoFi To Debut Via Merger With Chamath Palihapitiya’s SPAC

2 min read | January 08, 2021 10:21 AM EST | By Team Kalkine Media

Fintech firm SoFi To Debut Via Merger With Chamath Palihapitiya’s SPAC

Key Highligts of the SoFi- Social Capital Hedosophia Merger

The transaction is expected to value SoFi at nearly US$ 9 billion as it raises the combined company up to US$ 2.4 billion in gross proceeds, as per the official statement.
The proceeds include up to US$ 805 million from the initial public offering (IPO) held by the SPAC in October 2020.
It also includes a private investment in public equity (PIPE) of US$ 1.2 billion, led by Palihapitiya and Hedosophia,
The PIPE will also reportedly see funding from institutional investors such as accounts operated by investment management corporation BlackRock, Menlo Park-based Altimeter Capital Management, Baron Capital Group, etc.

A Little Background About SoFi

Founded in 2011, San Fransico-based Social Finance Inc is one of the latest companies to go the SPAC way to get publicly listed. The fintech offers its customer base of over 1.8 million users a range of digital financial services, including loan refinancing, investment solutions, etc.

SPACs, which are shell corporations that raise money in an IPO for the private company they are set to merge with, have seen a spike in popularity in the past year. Companies such as Canoo Ltd, Lordstown Motors, Nikola Corporation, etc., chose to sidestep the traditional IPO route and go public using SPACs in 2020.

Speaking of SPACs, Palihapitiya is widely known for his sponsorships of blank check firms, having worked on the SPAC mergers of space tourism enterprise Virgin Galactic, real estate platform Opendoor Technologies, etc.

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