Online FinTech startup Social Finance, Inc. or SoFi, is going public via a merger with special-purpose acquisition company Social Capital Hedosophia Holdings Corp V. The deal values the company at $8.65 billion post-money.
The transaction is expected to deliver up to $2.4 billion of gross proceeds to the combined company, including the contribution of up to $805 million of cash held in SCH’s trust account from its initial public offering in October 2020.
The combination is further supported by a $1.2 billion PIPE at $10 per share led by Chamath Palihapitiya, Founder and CEO of SCH, and Hedosophia, with commitments from funds and accounts managed by BlackRock, Altimeter Capital Management, Baron Capital Group, Coatue Management, Durable Capital Partners LP, and Healthcare of Ontario Pension Plan (HOOPP).
SoFi also received a previous anchor investment from funds and accounts advised by T. Rowe Price Associates, Inc.
Existing SoFi shareholders will roll 100 percent of their equity into the combined company. Concurrent with closing, $150 million of the transaction proceeds will be used for strategic secondary transactions that will help structure SoFi’s pro forma capitalization table in a way that is more conducive to obtaining an OCC national bank charter, the company said.
The deal is expected to close in the first quarter of 2021.