There are no shortage of VC firms who have allocated dollars to various fintechs throughout the world. But for individual investors it is difficult to get exposure to fintech companies because so few have actually gone public. There is one company called Renren that has allocated to numerous fintech firms and is currently publicly traded on the NYSE under symbol RENN.
The company operates a real name social networking platform in China but has most recently made investments in fintech businesses which will be the focus of this post.
Most notable investments from a US perspective include SoFi, Lending Home, Motif Investing and Fundrise. Renren has participated in SoFi’s series B, D, E and F rounds for a total investment of over $242 million. According to the 2015 year end report, “The Company held 28.85% and 21.20% equity interest of SoFi as of December 31, 2014 and 2015, respectively.” While we don’t have updated numbers, Renren owns a significant interest in SoFi, which continues to buck the trends of their competitors. The below table was taken from Renren’s 2015 year end earnings report and highlights their top fintech investments.
|Investment||Location||Cost (thousands)||Ownership %||Portfolio %|
|SoFi 1||San Francisco||$235,920||21.2%||58%|
|Lending Home||San Francisco||$65,843||14.7%||16%|
|Motif Investing||San Mateo||$40,000||10%||10%|
|Snowball Finance 2||Beijing||$35,534||n/a||9%|
|Credit Shop||Austin, TX||$15,000||n/a||4%|
|Fundrise 1||Wash DC||$15,144||25.3%||4%|
1 equity method investments; 2 available for-sale investments
In order to invest this amount in SoFi, the company borrowed nearly $60 million at 6% to finance the transaction. According to financial reports, the loan is expected to be repaid over three years with the potential to extend to five years if SoFi meets revenue targets. It was reported in September, 2016 that SoFi was seeking to raise an additional $500 million after their massive $1 billion Series E round in 2015. [Read more…]