In a move viewed as a step towards becoming more central to their member’s financial lives, SoFi acquired Zenbanx for $100mn in an all-stock deal. The deal will allow SoFi to offer their members the ability to open bank accounts, another area of finance that SoFi is keen to disrupt.
Fintech companies of all kinds have started to partner with banks but this deal is different. It marks the first time that an online lending platform will have the ability to accept deposits.
During Peter Renton’s latest podcast with SoFi CEO Mike Cagney, they discussed the future plans of the company and how they view themselves in the market. Mike explained that they are building SoFi to be a new kind of financial services firm. “We’re one that embraces the idea of beyond the product, it’s really around the concept of money, career and relationships, that’s what we’re trying to deliver into our member base.”
While the specific terms of the deal were not disclosed, the Wall Street Journal reported that “it was an all-stock deal valued at nearly $100 million”. It was also disclosed that the majority of the Zenbanx staff will be joining SoFi and Zenbanx founder and CEO Arkadi Kuhlmann will be coming on board to run the development of new banking services. Initially Zenbanx customers will not notice any difference, but in a few months when SoFi starts rolling out their new banking products all current Zenbanx customers will migrate to the new SoFi platform.
Zenbanx offers a mobile account in the U.S. and Canada that lets people save, send and spend money in multiple currencies. According to a Bloomberg article, Zenbanx had raised about $10mn in venture financing from Tencent Holdings and Recruit Strategic Partners at a $129mn pre money valuation. The global footprint of Zenbanx and the recent move into Australia will help SoFi transition into more of a global brand, something they are keen to do. [Read more…]