But what is SoFi (Not to be confused with “Sophie” a popular toy dog name) ? At the present moment, it is possible to invest in SoFi … He could stand to make billions if this goes well. The initial public offering (IPO) market overcame a lightning-quick bear market in 2020 to bounce back to levels not seen since the dot-com boom. | Crowdfund Insider: Global Fintech News, including Crowdfunding, Blockchain and more. I'd call it the mid-level credit, like the people with fair credit that all the other companies are overlooking, and they tried to do that area of the market better than everyone else. Man, all due respect. But what they have done is created a branding for Millenials that works, powered by PR and stats: If you ask Baby Boomers, millennials have destroyed pretty much everything—napkins, Applebee’s, starter homes, even cereal. There's nothing wrong with that at all. For one, forget about the scarcity thing where you can't make more gold, but potentially there could be more bitcoin made. That's really not that much time. But is this demographic really a force in the markets? Moser: Well, that sounds very good, Matt. We're going to take a look at what's in store for banks here, as earnings are set to begin on Friday, and a little bit more. My colleague, Sean Williams, has an article on fool.com right now that points out it would just take a majority of the bitcoin community to agree to raise that. Just some numbers behind that, a survey that was conducted by the Harris Poll back in 2020, way back in 2020, [laughs] said that 64% of Americans would consider purchasing or applying for financial products through technology company's platform instead of a traditional financial services provider. Upstart is really pursuing that. Xoom was a company, I think it was really a little bit ahead of its time almost, in that it was at the forefront of this AI powered finance model. Frankel: Upstart is trying to become a financial technology company that partners with banks and just to help them do their existing business better. One is that it's scarce. I mentioned that Upstart has done a little over 600,000 loans in its history, SoFi has 1.8 million members and all of these other products. The idea is that it simplifies the traditional process of IPOs, the IPO roadshow, the need to hire new underwriters, things like that. What else stands out to you about this business that makes it special? ... Sofi. Right now, I guess, their biggest competitive advantages are proprietary technology. It's not just lip service, it really does work. Now that companies like Palantir, Airbnb, and many others have filed for IPO; investors are looking further down the line at companies like SoFi that may eye an IPO at some point in the near future. When I mentioned Upstart, which is just a personal lender, just 600,000 loans, that's impressive, but comparatively, it's small. Let's wrap up with some of the risks or things that we're just keeping our eyes on here. This week, because banks are getting ready to kick off earnings season on Friday, we wanted to just go ahead and get your take on a couple of things you are watching here for banks this coming earnings season. Frankel: Which one of the biggest use cases for bitcoin as a currency is that it could be a worldwide universal currency. I/We represent a trust with assets in excess of $5 million, not formed to acquire the securities offered, whose purchases a sophisticated person makes. Greetings, Wishing all of our readers a very happy and healthy new year! Most importantly, SoFi is not actually a bank or financial institution. Moser: Sure. Over the past 24 hours alone, it's down about 18%. [laughs] I get it. They're targeting the overlooked consumers by traditional banks. There's no doubt about it. That's a group that historically banks have not been very easy to deal with. Social Finance, Inc. is an American online personal finance company. Zero Hedge broke the story on how SoftBank has been a major participant in the options market. That's why we're seeing this giant wave of SPAC IPOs. Companies like LevelX are competing with Robinhood to offer the same thing only better, more fair, and faster. Frankel: It's a fee income business model. I did go through the process of getting some small business administration loans done for folks who were self employed, 15 years ago, maybe even more. Upstart is a personal lender, that's pretty much what business they're involved in right now. We mentioned personal loans, the student loans, they just launched their credit card product on the lending side, they also have a high-yield savings platform, they have an investing platform where you can buy and sell stocks similar to Robinhood, I would call it, but honestly doing a better job of educating the consumer and really bringing the community into the investing process, not just trading. Okay, so let me give you one statistic. It hasn't proven as a useful currency over the U.S. dollar, especially with all these fintech innovations that we're talking about. That's a big cost of capital advantage for a lender. Moser: Yeah. It seems like there isn’t anything you can’t get at SoFi. At the same time, the rise of the digital economy is offering ,millennials other options. I just don't know enough about bitcoin to really even care. Or you can drop us an email at MFindustryfocus@fool.com. One thing that really surprised me about this SPAC deal is that the valuation really doesn't seem that insane. They use over 1,600 data points, not just the FICO score, they use 1,600 consumer data points to get a really good picture of someone's risk profile. Beyond that, SoFi is building a stadium in the hood, you know, Inglewood, where Dr. Dre is from. They use their algorithms to find creditworthy borrowers that the system has overworked, and partners with banks who make the actual loans, and Upstart gets a referral fee for its services. ... Social Finance (SoFi… At the present moment, it is possible to invest in SoFi for as little as $25,000 if you are accredited. That's not a stored value. The Innovation Economy. Moser: Yeah, it can be, and certainly it does seem like this is another business with, I don't want to say founders leading the way is necessarily competitive advantage, but it's certainly a sign that leadership is in the same boat as investors. Because of this it is highly risky, as organizations do not have … PreIPOSwap.com 1/9/2021 — New York, NY — With the news of another Pre IPO company going public via SPAC (SoFi) investors are … SoFi is not yet publicly traded, but there is a way to claim a piece of this exciting company’s innovation and growth potential before any IPO. With contactless payments I can pay by just tapping my phone on something. Maybe it is. Upstart, it's not taking out a lot of credit risk, in other words. Let's not be a stranger, I look forward to seeing you next week. I don't see the use case that's going to appeal to main street. You can spend bitcoin at about 2,300 merchants right now. That's --. To get started investing, check out our quick-start guide to investing in stocks. Pre-IPO shares … This is a company, one of the co-founders, David Gerard, who's the CEO of the business and co-founder, owns I think somewhere in the neighborhood of 16% of the shares. The new CEO, Charlie Scharf, has prioritized expense reduction, saying he wants to cut I think $10 billion of expenses off the bank. I get why they see a big use case at it, I really do. Matt, as I said in the intro there, we're going to talk a little bit about a brand new IPO, and then a company that's talking about getting ready to IPO. You said about a 16% stake. SoFi IPO SoFi is a finance company offering a range of lending and wealth management services. Now that companies like Palantir, Airbnb, and many others have filed for IPO; investors are looking further down the line at companies like SoFi that may eye an IPO at some point in the near future. A high-level overview of Social Finance (SOFI) stock. I mean, you could make the argument that PayPal and Square are onboard with bitcoin and PayPal has said that it wants to make bitcoin usable at its merchants. BEFORE VIEWING ITS CONTENTS YOU MUST SELF-CERTIFY YOURSELF AS AN ACCREDITED INVESTOR. For Matt Frankel, I'm Jason Moser. IPOE, Social Capital Hedosophia V is the official name for it, but just call it an IPOE, let's keep it simple, they raised about $800 million and the various other investors are contributing another $1.2 billion to acquire SoFi, which is an online financial business. LevelX also offers Pre IPO investing for accredited investors in companies like SoFi. They take many factors – including your level of interest – into consideration before setting an IPO (or Pre-IPO) … Who do you think was mostly on the other side of those trades? [laughs] It helps businesses process checks and things like that. That's something they have to upkeep, obviously, that comes with responsibilities, and regulations, and ratios, and requirements. An IPO is when a company’s shares trade on a public market for the first time. I know money is not the biggest motivating factor for everybody, but you got to think it's there. You could make more bitcoin. The last time we heard from Wells Fargo was the third quarter when the pandemic had not subsided, but it was definitely at a low. What does Upstart do? Upstart gets referral fees. I'm not saying it's not special. But it just showed me really even back then, the power of using that data in order to assess risk better. It's really gone beyond just banks, and it's more about tech companies partnering with banks. This should not be confused with SoFi… EquityZen is a marketplace for shares of proven pre IPO tech companies. In April 2019, SoFi CEO Anthony Noto stated in an interview with Yahoo! I appreciate that. Thanks for listening and we'll see you next week. Remittances aren't anything new. But that is a big advantage, especially when one of them still has a lot of skin in the game like that. SoFi is a finance company that offers a range of lending and wealth management services. [laughs] That's OK, don't worry, we still own PayPal, so we got part of it there. 2,300 different retailers. Moser: Yeah, I agree. Jason Moser: It's Monday, Jan. 11. That's why. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Frankel: I understand the concept. There was still some stimulus being pumped into the market. No. I don't want to store a value that can fluctuate by 20% in a day. Market data powered by FactSet and Web Financial Group. They partner with banks. Technology then wasn't where it is today, so I can imagine that it really resonates with that younger consumer. Moser: Remember, as always, you can reach out to us on Twitter at @MFIndustryFocus. Matt is a Certified Financial Planner based in South Carolina who has been writing for The Motley Fool since 2012. But it still sounds pretty reasonable when you consider what some of these other fin techs are trading for, considering just the wide scope of what they do. A banking charter really makes sense for them. Joining me this week, it's my man, [laughs] Certified Financial Planner, Matt Frankel. Frankel: That's a big motivation. I don't buy the use case for bitcoin. But as you mentioned, that can be a real source of capital, which is their business. Moser: Just a reminder for all of our bitcoin bull listeners, you can reach Matt on Twitter @TMFMathGuy. This is unusual, as retail investors typically don’t get allocated pre-IPO shares, and instead must get into markets on the first-day trading rush (at inflated prices). Frankel: Now you're going to make me be the bad guy again. Frankel: So far, to my knowledge, Upstart has no desire to become a bank. It's a volatile day when the U.S. dollar moves by 1% in either direction against say, the euro. Moser: I guess. PDF Filescandals , and their general unhappiness with the banking status quo . It's trading at a huge premium because he's been so successful with the other ones. This trend looks likely to continue to grow. But I don't see it translating to widespread mainstream adoption anytime in the next decade or more. Someone has a mediocre credit score, but they just got out of college, that's something they would consider in their algorithm. Frankel: That's not going to prevent a Reddit thread from popping up. SoFi will go public via a SPAC … Then that's a big competitive advantage all by itself. They applied for and received conditional approval, like you said, in October, they got conditional approval for a bank charter. Generally their edge is they offer reduction and fees vs. your behemoth Wall St. banks that get off on charging huge fees. Like you said, they started as a community-based student lender, refinancing loans, issuing private student loans, they branched out into mortgages. But what they have done is created a branding for Millenials that works, powered by PR and stats: LevelX also offers Pre IPO investing for accredited investors in companies like SoFi. Then, the pair take a closer look at fintech start-up SoFi, which is getting set to go public via a SPAC merger with Social Capital Hedosophia Holdings V (NYSE:IPOE). I saw that SoFi, unlike Upstart, has actually gotten conditional approval for its National Bank charter application. Why don't you elaborate a little bit for us? In this week's Industry Focus: Financials, Fool.com contributor Matt Frankel, CFP, and host Jason Moser discuss what Upstart does and why investors are so excited. Frankel: The brief overview is a SPAC which stands for special purpose acquisition company. They're valuing SoFi at about $8.65 billion, including the $2.4 billion and new money that's coming in. We at Iron Edge VC are very proud to have pre-IPO access to SoFi shares. That acquisition target gets that few $100 million plus some extra capital infusion, and in exchange, they combine these businesses, go public, under the SPACs, already a public entity. That's pretty impressive. They just paid $1.2 billion to acquire it. When my wife and I were in the market for a second home, I got a mortgage quote from SoFi, they were the lowest when we saw. The unemployment benefits, in a lot of cases, were still going onto the third quarter, for example. SoFi Isn’t Aiming at an IPO This Year, CEO Says SoFi, the fintech startup that is valued at more than $4 billion, isn’t likely to be joining the public markets any time soon. 82% of millennials have no issue with switching banks. Listen, just like I said, we don't cover a lot of bitcoin on this show because it stands on its own. I mean, a majority consensus is why we have things like bitcoin cash, the offshoot cryptocurrency. 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