According to multiple reports, Rosenblatt has given SoFi a $30 price target for the Fintech. Shares in SoFi rose on the news and currently trades at around $22/share.
SoFi floated shares earlier this month in a SPAC offering with Chamath Palihapitiya’s Social Capital Hedosophia Holdings Corp. V. SoFi was valued at $8.65 billion post-money and the deal is expected to provide up to $2.4 billion in cash proceeds, including a PIPE of $1.2 billion, and up to $805 million of cash held in the trust account of Social Capital Hedosophia Holdings Corp. V.
SoFi is a fast-growing digital bank that started as a student loan refinancing platform and has since added a broad portfolio of financial services designed to appeal to a younger generation of consumers who have no interest in queuing up at a bank branch.
SoFi offers both traditional banking services, such as credit and savings accounts, as well as stock trading and access to crypto. Rosenblatt’s premise as to why SoFi should garner a higher valuation is the fact that traditional financial services firms tend to offer fewer services at a higher cost – that is due in part to the need to support unnecessary physical locations and legions of employees. SoFi is not alone in challenging incumbent financial services firms as a battalion of Fintechs are seeking to compete with old banks and disrupt antiquated models with digital services that appeal to a generation that expects modern financial services.
In March 2021, SoFi acquired a small California-based bank thus gaining a banking charter positioning the Fintech to reduce certain costs.