SoFi Technologies, Inc. (NASDAQ: SOFI), a “one-stop shop” for digital financial services that helps members borrow, save, spend, invest and protect their money, and PrimaryBid Technologies Inc., a capital markets fintech firm, announced the launch of DSP2.0, a Directed Share Platform (DSP) that offers a unique approach to equity program management for firms seeking to raise capital in the U.S.
DSPs enables firms to allocate a portion of their share offerings to certain individuals or groups like workers or specific clients.
Since these solutions typically require manual processing and don’t integrate too well with other systems, they are costly as well as quite time-intensive to operate and limit investor participation to a “select few.”
With a potential / anticipated rebound for the Initial Public Offering (IPO) market in 2025, SoFi’s product offering aims to bring equity program management, IPO, and follow-on offering processes into the digital age.
It is said to give issuers greater flexibility in securing capital by allowing them to involve non-institutional investor groups ‘at scale.”
SoFi’s DSP provides a cohesive investor experience, automations to minimize manual back-office processing, as well as expanded integrations with a range of marketing analytics tools.
Anthony Noto, CEO of SoFi said that for many years, firms have wanted to offer the opportunity to take part in their IPOs to the employees, partners, customers, and others who helped them grow.
However, Anthony explained that traditional DSPs tend to have high account minimum requirements, carry considerable costs to firms, and also tend to lack benefits to underwriters, thus limiting their appeal.
They added that SoFi provides firms going public a digital way to offer IPO shares to employees and other people who helped build their business, and whomever they want to direct the shares to, “whether it’s to 10 or 10,000 people.”
People are able to open an account from a smartphone, transfer funds easily, and stay informed during the IPO process – with “no costs” or deposit requirements.
At SoFi, they claim to continue to offer Main Street investors access to products such as alternative investments as well as IPOs, which have historically been usually reserved for high net worth individuals.
Anand Sambasivan, CEO of PrimaryBid said that until now, they’ve lacked tools to deliver this “:at scale” with meaningful data, a problem PrimaryBid is solving internationally.
They added that this solution for the U.S. market, combining SoFi and PrimaryBid’s technologies, ensures regulatory compliance while also removing the administrative overhead from issuers as well as advisors when running a DSP.
SoFi’s DSP2.0 allows firms to shape their offer around strategic needs, not technical limitations.
As covered, PrimaryBid is a fintech that is focused on building retail capital-raising solutions for regulated financial institutions, enabling smart investor inclusion in public and private offerings globally.
Their SaaS platform facilitates investor access in IPOs, follow-ons, block sales, and corporate and government bonds, and transforms retail investor participation into a systematic and data-driven component of capital raising.
PrimaryBid says it has facilitated over 350 transactions for companies ranging from large-cap to SMEs across the UK, EU and U.S.
Their tech ensures compliance while widening access to regulated markets, enabling firms to include their committed stakeholders in capital journeys.