SoFi reportedly exploring possibility to go public via SPAC

Personal finance company SoFi, which in October got preliminary approval for a banking charter from the OCC, is exploring possibilities to go public through a merger with a special purpose acquisition company (SPAC), according to a report from Reuters.

Why should we care?
If SoFi’s plans materialize, it will be the latest among a growing number of firms to head to the public markets via SPAC this year. In 2020, 208 SPACs raised more than $70B. A SPAC raises funds in an IPO with the aim of acquiring a private company, which in turn becomes public as a result of the merger. SoFi, a 9-year-old company that began as a lender and has since expanded to wealth management, banking, and other financial services, last year indicated that an IPO wasn’t a priority, but still part of its longer-term plans. The Reuters report, citing unnamed sources, claims that SoFi, which is valued at $4.8B, held talks with a number of SPACs, though there was no certainty an agreement would be reached.