- SoFi’s mission is to help people achieve financial independence
by getting their money right, providing access to a comprehensive
suite of services in a single app that empowers members to borrow,
save, spend, invest and protect their money
- SoFi’s one-stop shop, multi-product strategy and leading
technology platform, Galileo, place the company at the epicenter of
the digital revolution in financial services
- Transaction values SoFi at an equity value of $8.65 billion
post-money and is expected to provide up to $2.4 billion in cash
proceeds, including a fully committed PIPE of $1.2 billion, and up
to $805 million of cash held in the trust account of Social Capital
Hedosophia Holdings Corp. V (“SCH”), in addition to a previous
anchor investment from funds and accounts advised by T. Rowe Price
Associates, Inc. that closed on December 30, 2020
- The PIPE is being led by Chamath Palihapitiya, Founder and CEO
of SCH, and Hedosophia, who are together contributing $275 million;
top-tier institutional investors comprise the remaining $950
million of the PIPE, including funds and accounts managed by
BlackRock, Altimeter Capital Management, Baron Capital Group,
Coatue Management, Durable Capital Partners LP, and Healthcare of
Ontario Pension Plan (HOOPP)
Social Finance, Inc. (“the Company” or “SoFi”), a leading
next-generation financial services platform, has entered into a
definitive agreement with Social Capital Hedosophia Holdings Corp.
V (“SCH”) (NYSE: IPOE), a publicly traded special purpose
acquisition company, to bring a major consumer-focused financial
technology business to the public markets. The transaction values
the Company at an equity value of $8.65 billion post-money.
Company Overview
SoFi is a member-centric, one-stop shop for financial services,
including loan refinancing, mortgages, personal loans, credit
cards, insurance, investing and deposit accounts, that has allowed
more than 1.8 million members to borrow, save, spend, invest and
protect their money since its inception. SoFi’s full suite of
financial products offers members the speed, selection, content and
convenience that only an integrated digital platform can provide
and allows them to manage their financial lives in one application,
all on their phone.
SoFi’s consumer offering is augmented by its ownership and
independent operation of Galileo, one of the leading providers of
critical technology infrastructure services, including
customer-facing and back-end capabilities, to fast-growing
financial services providers. Galileo has approximately 50 million
accounts on its platform.
SoFi’s consumer and enterprise businesses are highly
complementary, enabling SoFi to provide faster product innovation
and speed of service to both SoFi members and the customers of
Galileo’s clients. SoFi has experienced rapid acceleration with
this strategy and has achieved six consecutive quarters of
year-over-year member growth.
SoFi received preliminary, conditional approval from the U.S.
Office of the Comptroller of the Currency (OCC) for a national bank
charter in October 2020. If SoFi obtains final regulatory approval
to own a bank, it would have a lower cost of funds to further
support SoFi’s growth.
SoFi delivered over $200 million in total net revenue in the
third quarter of 2020 and is on track to generate approximately $1
billion of estimated adjusted net revenue in 2021, representing
year-over-year growth of approximately 60 percent, and full-year
adjusted EBITDA profitability.
The Company’s world-class management team, led by CEO Anthony
Noto, will continue to lead SoFi following the transaction.
Management Comments
Anthony Noto, Chief Executive Officer of SoFi, said:
“SoFi is on a mission to help people achieve financial
independence to realize their ambitions. Our ecosystem of products,
rewards and membership benefits all work together to help our
members get their money right. With the secular acceleration in
digital-first financial services offerings, SoFi is the only
company providing a comprehensive solution all in one app. The new
investments and our partnership with Social Capital Hedosophia
signify the confidence in our strategy, the momentum in our
business, as well as the significant growth opportunity ahead of
us. We look forward to helping more people get their money right in
the years to come.”
Chamath Palihapitiya, Founder and CEO of Social Capital
Hedosophia V, said:
“SoFi’s innovative, member-first platform has demystified
financial services for millions of Americans and simplified the
process for those looking to apply for loans, invest their money,
obtain insurance and refinance their debt, among many other tasks
that were previously arcane and needlessly complicated.
Additionally, the acceleration of cross-buying by existing SoFi
members has created a virtuous cycle of compounding growth,
diversified revenue and high profitability. We look forward to
partnering with Anthony and his team as they help even more members
to achieve financial independence.”
Transaction Overview
The transaction is expected to deliver up to $2.4 billion of
gross proceeds to the combined company, including the contribution
of up to $805 million of cash held in SCH’s trust account from its
initial public offering in October 2020. The combination is further
supported by a $1.2 billion PIPE at $10 per share led by Chamath
Palihapitiya, Founder and CEO of SCH, and Hedosophia, with
commitments from funds and accounts managed by BlackRock, Altimeter
Capital Management, Baron Capital Group, Coatue Management, Durable
Capital Partners LP, and Healthcare of Ontario Pension Plan
(HOOPP). SoFi also received a previous anchor investment from funds
and accounts advised by T. Rowe Price Associates, Inc.
Existing SoFi shareholders will roll 100 percent of their equity
into the combined company. Concurrent with closing, $150 million of
the transaction proceeds will be used for strategic secondary
transactions that will help structure SoFi’s pro forma
capitalization table in a way that is more conducive to obtaining
an OCC national bank charter. All references to available cash from
the trust account and retained transaction proceeds are subject to
any redemptions by the public shareholders of SCH and payment of
transaction expenses.
The transaction, which has been unanimously approved by SCH’s
board of directors and the independent directors of SoFi’s board of
directors, is expected to close in the first quarter of 2021, and
is subject to approval by SCH's shareholders and other customary
closing conditions, including any applicable regulatory
approvals.
Advisors
Connaught acted as financial advisor, Credit Suisse acted as
financial advisor, capital markets advisor and placement agent, and
Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisor
to SCH. Citi and Goldman Sachs & Co. acted as financial advisor
and placement agent, and Wachtell, Lipton, Rosen & Katz and
Goodwin Procter LLP acted as legal advisors to SoFi.
Investor Conference Call
Management of SoFi and SCH will host an investor conference call
on January 7, 2021 at 1 PM ET to discuss the proposed transaction
and review an investor presentation. For those investors who wish
to participate, the conference call can be accessed by visiting
https://event.on24.com/wcc/r/2952606/91A65736AA851D7C8A87FAB7D07BB896.
About Social Capital Hedosophia Holdings
Social Capital Hedosophia Holdings is a partnership between the
investment firms of Social Capital and Hedosophia. Social Capital
Hedosophia Holdings unites technologists, entrepreneurs and
technology-oriented investors around a shared vision of identifying
and investing in innovative and agile technology companies. To
learn more about Social Capital Hedosophia Holdings, visit
www.socialcapitalhedosophiaholdings.com.
About SoFi
SoFi helps people achieve financial independence to realize
their ambitions. Our products for borrowing, saving, spending,
investing and protecting give our over 1.8 million members fast
access to tools to get their money right. SoFi membership comes
with the key essentials for getting ahead, including career
advisors and connection to a thriving community of like-minded,
ambitious people. SoFi is also the naming rights partner of SoFi
Stadium, home of the Los Angeles Chargers and the Los Angeles Rams.
For more information, visit www.SoFi.com or download our iOS and
Android apps.
Additional Information and Where to Find It
This press release relates to a proposed transaction between
SoFi and SCH. This press release does not constitute an offer to
sell or exchange, or the solicitation of an offer to buy or
exchange, any securities, nor shall there be any sale of securities
in any jurisdiction in which such offer, sale or exchange would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. SCH intends to file a
registration statement on Form S-4 with the SEC, which will include
a document that serves as a prospectus and proxy statement of SCH,
referred to as a proxy statement/prospectus. A proxy
statement/prospectus will be sent to all SCH shareholders. SCH also
will file other documents regarding the proposed transaction with
the SEC. Before making any voting decision, investors and security
holders of SCH are urged to read the registration statement, the
proxy statement/prospectus and all other relevant documents filed
or that will be filed with the SEC in connection with the proposed
transaction as they become available because they will contain
important information about the proposed transaction.
Investors and security holders will be able to obtain free
copies of the registration statement, the proxy
statement/prospectus and all other relevant documents filed or that
will be filed with the SEC by SCH through the website maintained by
the SEC at www.sec.gov.
The documents filed by SCH with the SEC also may be obtained
free of charge at SCH’s website at
http://www.socialcapitalhedosophiaholdings.com/docse.html or upon
written request to 317 University Ave, Suite 200, Palo Alto,
California 94301.
Participants in Solicitation
SCH and SoFi and their respective directors and executive
officers may be deemed to be participants in the solicitation of
proxies from SCH’s shareholders in connection with the proposed
transaction. A list of the names of such directors and executive
officers and information regarding their interests in the business
combination will be contained in the proxy statement/prospectus
when available. You may obtain free copies of these documents as
described in the preceding paragraph.
Forward-Looking Statements
This press release contains certain forward-looking statements
within the meaning of the federal securities laws with respect to
the proposed transaction between SoFi and SCH. These
forward-looking statements generally are identified by the words
“believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,”
“strategy,” “future,” “opportunity,” “plan,” “may,” “should,”
“will,” “would,” “will be,” “will continue,” “will likely result,”
and similar expressions. Forward-looking statements are
predictions, projections and other statements about future events
that are based on current expectations and assumptions and, as a
result, are subject to risks and uncertainties. Many factors could
cause actual future events to differ materially from the
forward-looking statements in this document, including but not
limited to: (i) the risk that the transaction may not be completed
in a timely manner or at all, which may adversely affect the price
of SCH’s securities, (ii) the risk that the transaction may not be
completed by SCH’s business combination deadline and the potential
failure to obtain an extension of the business combination deadline
if sought by SCH, (iii) the failure to satisfy the conditions to
the consummation of the transaction, including the adoption of the
Merger Agreement by the shareholders of SCH, the satisfaction of
the minimum trust account amount following redemptions by SCH’s
public shareholders and the receipt of certain governmental and
regulatory approvals, (iv) the lack of a third party valuation in
determining whether or not to pursue the proposed transaction, (v)
the inability to complete the PIPE Investment, (vi) the occurrence
of any event, change or other circumstance that could give rise to
the termination of the Merger Agreement, (vii) the effect of the
announcement or pendency of the transaction on SoFi’s business
relationships, operating results, and business generally, (viii)
risks that the proposed transaction disrupts current plans and
operations of SoFi and potential difficulties in SoFi employee
retention as a result of the transaction, (ix) the outcome of any
legal proceedings that may be instituted against SoFi or against
SCH related to the Merger Agreement or the proposed transaction,
(x) the ability to maintain the listing of SCH’s securities on a
national securities exchange, (xi) the price of SCH’s securities
may be volatile due to a variety of factors, including changes in
the competitive and highly regulated industries in which SCH plans
to operate or SoFi operates, variations in operating performance
across competitors, changes in laws and regulations affecting SCH’s
or SoFi’s business and changes in the combined capital structure,
(xii) the ability to implement business plans, forecasts, and other
expectations after the completion of the proposed transaction, and
identify and realize additional opportunities, and (xiii) the risk
of downturns and a changing regulatory landscape in the highly
competitive industry. The foregoing list of factors is not
exhaustive. You should carefully consider the foregoing factors and
the other risks and uncertainties described in the “Risk Factors”
section of SCH’s registration on Form S-1 (File Nos. 333-248915 and
333-249396), the registration statement on Form S-4 discussed above
and other documents filed by SCH from time to time with the SEC.
These filings identify and address other important risks and
uncertainties that could cause actual events and results to differ
materially from those contained in the forward-looking statements.
Forward-looking statements speak only as of the date they are made.
Readers are cautioned not to put undue reliance on forward-looking
statements, and SoFi and SCH assume no obligation and do not intend
to update or revise these forward-looking statements, whether as a
result of new information, future events, or otherwise. Neither
SoFi nor SCH gives any assurance that either SoFi or SCH, or the
combined company, will achieve its expectations.
Non-GAAP Financial Measure and Related Information
This press release references adjusted net revenue and adjusted
EBITDA, which are financial measures that are not prepared in
accordance with U.S. generally accepted accounting principles
("GAAP"). These non-GAAP financial measures do not have a
standardized meaning, and the definition of adjusted net revenue
and adjusted EBITDA used by SoFi may be different from other,
similarly named non-GAAP measures used by others. In addition, such
financial information is unaudited and does not conform to SEC
Regulation S-X and, as a result, such information may be presented
differently in future filings by the Company with the SEC.
Management uses forward-looking non-GAAP measures to evaluate
SoFi’s projected financials and operating performance. Certain
forward-looking non-GAAP measures are presented without
corresponding GAAP reconciliations due to the inherent difficulty
in forecasting and quantifying certain amounts that are necessary
for such reconciliations.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210107005746/en/
SoFi:
Investors The Blueshirt Group sofi@blueshirtgroup.com
Media Rachel Rosenzweig SoFi rrosenzweig@sofi.org
+1.847.421.2093
Social Capital Hedosophia:
Media Sara Evans / Kerry Golds Finsbury sara.evans@finsbury.com
/ kerry.golds@finsbury.com +1.917.344.9279 / +1.646.957.2279
Jonathan Gasthalter / Carissa Felger Gasthalter & Co.
SCH@gasthalter.com +1.212.257.4170
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