$IPOE is merging with SoFi with a post transaction equity value of $8.7 billion. This is an incredible company in banking and fintech. This is anew section of fintech bring the likes of lending and financial services all in one. No long will you need several financial accounts, SoFi is here to be the all in one financial service! This SPAC has a $1.225B PIPE deal with Chamath Palihapitiya, BlackRock, and Altimeter Capital Management as some of the investors. SoFi has had an accelerating revenue growth in 2021 with string incremental adjusted EBITDA margins through 2025. The current projected vote date for the approval of the merge is set to be on April 7th, 2021.
This can be compared to Amazon and Alibaba who have transform the wholesale sector by doing everything themselves. SoFi is here to compete with the likes of Bank of America, Visa, PayPal, and Wells Fargo. SoFi is your all in one banking app. SoFi has three business segments of Lending, Technology Platform (Provided by Galileo), and Financial Services.
Key Investment Highlights
The shift to digital financial services is accelerating and here to stay. About 59% of people have increased their Fintech app usage driving an 8% gain in penetration. Even 87% of consumers say they won’t go back and why digital is better.
- Greater Selection
- Faster service
- More Content
- Greater Convenience
- No Fees or Account Minimums
SoFi will one day make banks like these obsolete in terms of managing your financial accounts. No longer will you need to pay fees for wires or have to appear in banks to manage your money properly.
Member growth is accelerating and on track to exceed three million members in 2021 up 75% after six consecutive quarters of accelerating YoY growth. SoFi’s strategy is about enhancing a members experience & full suite of products that leverages the financial services productivity loop.
SoFi is positioned to be the “Winner Takes Most” in its sector. Targeting high earners not well served ages 22+ predominantly earning $100,000+. Uniquely offering comprehensive suite of products and services in a sea of single point solutions – only place to get your money right on one app. Next generation fully integrated tech and operations, and digitally native financial services business. Competitive advantage via financial services productivity loop that drives superior unit economics. Also an actionable data from an ecosystem of products across lending, financial services and payments processing.
Overall I think $IPOE is a potential purchase. Today we saw a +50% increase in the stock price just off the initial news of the merger. Stock peaked at $22 and settled around $18. As more attention is drawn to this SPAC more buyers will come knocking on the door of future of financial services. No reason $IPOE won’t revisit $22 and continue to push forward. This is a much needed app t simply the daily transactions of every citizens lives.