Chamath Palihapitiya has orchestrated some pretty impressive deals through special purpose acquisition companies (SPACs) in the past couple of years, including Virgin Galactic Holdings (SPCE -5.47%) and Opendoor Technologies (OPEN -3.59%). And with three pre-deal SPACs still searching for acquisition targets, investors have been anxiously waiting to see what he might take public next.
It appears we have our answer. Palihapitiya's fifth blank-check company, Social Capital Hedosophia Holdings V (IPOE), reportedly plans to take fintech start-up Social Finance (SoFi) public. The SPAC raised about $800 million in an IPO in 2020 and had been looking for an acquisition target ever since.
The deal values SoFi at $8.65 billion, including the money being contributed as part of the SPAC merger.
Image source: Getty Images.
SoFi is an online lender offering personal loans, mortgages, and student loan refinancing, as well as newer products and services like stock trading, a robo-advisor, and a credit card. The company was founded in 2011 and recently applied for a banking charter. It reported that it expects to generate about $1 billion in revenue in 2021.
It was widely reported about a month ago that SoFi was considering a 2021 IPO using a SPAC merger.
The company's most recent funding round valued SoFi at $5.7 billion in private markets, so while the rumored SPAC merger would certainly be a step up in valuation, it wouldn't be quite as much of a premium as many other recent IPOs have received.
The SPAC itself is holding more than $800 million that will be included, and there is expected to be a private investment in public equity (or PIPE) of $1.2 billion as well, so an $8.65 billion post-money valuation doesn't seem like a big stretch.
