It looks like investors are still very, very interested in online lenders. For proof of this, you need look no further than San Francisco, where a local startup by the name of Social Finance just completed a $1 billion round of funding led by Japan’s SoftBank, which brings its lifetime funding to a total of $1.42 billion. Social Finance offers borrowers and lenders dealing in loans a way to connect with each other without having to go through banks, with a heavy focus on offering much lower rates than traditional lenders.
Social Finance Inc. raised $1 billion, showing that there’s still deep interest in a new crop of online lenders despite market volatility and the lackluster stock performance of the industry’s biggest player. Japan’s SoftBank Group Corp. led the fundraising round, according to a statement Wednesday. Affiliates of Dan Loeb’s Third Point, Wellington Management Co., Institutional Venture Partners, RenRen, Baseline Ventures and DCM Ventures also participated. The final amount raised surpassed the $800 million proposed two months ago, before August’s global stock rout. The money will help Chief Executive Officer Mike Cagney pursue his vision of making SoFi the go-to financial services firm for “high-achieving professionals.” The venture started four years ago by helping graduates of top-tier universities refinance student loans at lower rates. Since then, SoFi has broadened offerings to include personal loans and mortgages, and Cagney has said he’s interested in providing wealth-management services.