It's an interesting business model. Moser: Remember, as always, you can reach out to us on Twitter at @MFIndustryFocus. 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). SoFi is a lot more than a personal lender at this point. It's a volatile day when the U.S. dollar moves by 1% in either direction against say, the euro. Frankel: So far, to my knowledge, Upstart has no desire to become a bank. I don't care. I like Wells Fargo, especially as a gauge of what's going on in the banking sector, because they're the closest thing to a pure play just savings and loan of the big banks. Enter your email address to subscribe to this blog and receive notifications of new posts by email. [laughs]. This reminds me a little bit of a company from a little while back. If they can address that area of the lending market, which is millions of people better than anyone else, they're going to keep growing like this. That's a big multiple to pay. But what is SoFi (Not to be confused with “Sophie” a popular toy dog name) ? Thanks as always to Tim Sparks for putting the show together for us. That's something they have to upkeep, obviously, that comes with responsibilities, and regulations, and ratios, and requirements. I know that you had a great conversation, not all that long ago with Dan Caplinger and you had gone over some of the basics here in regard to SPACs and how they work. Much of that growth, rising from 10 million at the start of 2020, has been fueled by the coronavirus pandemic as millennials have increasingly seen opportunity in the beaten-down stock market. I want to see their expenses. They're valuing SoFi at about $8.65 billion, including the $2.4 billion and new money that's coming in. There's data there that shows more and more consumers, particularly even younger consumers, really are trusting of a lot of these tech companies that partner with financial service providers in order to ultimately get done whatever they need to get done. They were founded by former Google [Alphabet] people, if that helps. 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. Upstart's not a bank itself like a lot of these fintechs. They are growing pretty impressively. Man, all due respect. It's been around for a little while, and it's interesting to see how these businesses evolved because it really started out as an alumni funded lending model that ultimately it was just helping students and graduates deal with student loans. Frankel: The first three were Virgin Galactic, like I just mentioned, Opendoor Technologies, which just finalized, and Clover Health, which just finalized. Before we get into SoFi real quickly, let's just give our listeners a quick rundown on how SPACs work. Let's go ahead and start through with Upstart. Let's start just from the 50,000 foot view here. Upstart as a personal lender, unlike most of these Fintechs, their main premise is that traditional banks either are not convenient enough, or just don't serve the population well enough, and they aim to solve that problem. So far, like you said, 75% reduction in loss ratios, it looks like it's working so far so that [laughs] technology is really that good. I mentioned Upstart's trading at about 20 times revenue, so far it's trading at about eight times revenue and that's including about $2.4 billion in cash. Matthew Frankel: Pretty good, as you can see by the background, it's another day in paradise. Over the past 24 hours alone, it's down about 18%. It was something that was helping students deal with student debt, and it really has grown to be a full-fledged banking style operation here. The new CEO, Charlie Scharf, has prioritized expense reduction, saying he wants to cut I think $10 billion of expenses off the bank. I think it's down somewhere in the neighborhood of about 20% a year. Moser: Sure. So what gives – why would anyone use SoFi instead of Goldman’s Socks? [laughs] Maybe that's a little bitterness coming through. They take many factors – including your level of interest – into consideration before setting an IPO (or Pre-IPO) … 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 full transcript follows the video. Forget about that. [laughs]. Frankel: There's a reason that there's over $100 billion in the second largest cryptocurrency. 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. I think that's going to do it for us this week. 3 Recommend SoFi: Based on a survey of 1,642 SoFi members from 02/21/2019 to 03/13/2019 who funded a loan with SoFi within 6 months of the survey date, 98% of participants would recommend SoFi to a friend. Frankel: I thought you were about to give out my address or something. That's a market that this non-traditional credit model, by companies like Upstart, can really help solve. But one that I think a lot of folks were excited to see go public, because it's another one of those companies that's really helping reshape the space of finance, and in particular lending. Frankel: On a similar note, that age group you were just referring to, a lot of them skewed toward being self employed, myself included. Frankel: On that note, it's interesting to point out how Upstart makes its money. You could make more bitcoin. Frankel: Now you're going to make me be the bad guy again. 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. But I don't see it translating to widespread mainstream adoption anytime in the next decade or more. We at Iron Edge VC are very proud to have pre-IPO access to SoFi shares. The company primarily caters to early-stage professionals and offers variable and fixed rate parent, personal, and MBA loans, mortgage refinancing, and more. They just paid $1.2 billion to acquire it. From Frankel: Bitcoin's been around for a decade now. The idea is that it simplies the traditional process of IPOs, the IPO roadshow, the need to hire new underwriters, things like that. And last but not least, we discuss the recent correction in bitcoin and other cryptocurrencies, and why Matt and Jason aren't likely to buy bitcoin anytime soon. #IPO #preipo #cryptocurrency #SpaceX #impossiblefoods #grab #Sofi … Frankel: The technology used is the proprietary element of this by far, is that algorithm, the whole non-traditional risk model that they're doing, and the fact that they are willing to really bend on FICO scoring. PreIPOSwap.com 1/9/2021 — New York, NY — With the news of another Pre IPO company going public via SPAC (SoFi) investors are … I've mined bitcoin, I've used bitcoin, I lived off bitcoin for a day just to see if it was possible. There's three main arguments that I always hear when people tell me I should own bitcoin. SoFi IPO SoFi is a finance company offering a range of lending and wealth management services. Upstart, it's not taking out a lot of credit risk, in other words. Then it will be interesting to see how the Robinhood traders ebb and flow the market cap of their own trading platform, in real time. Frankel: Which one of the biggest use cases for bitcoin as a currency is that it could be a worldwide universal currency. I appreciate that. Maybe it is. Frankel: Well, like you said, they are pretty recent IPO, and given the times, like every other IPO, they've shot through the roof since they [laughs] went public. I mean, the scarcity argument, I don't totally buy. I'm not saying it's not special. These are two very similar businesses, so I'm going to be interested to get your take on then both. I want to see any commentary toward when that might start to happen and to what extent. Why don't you elaborate a little bit for us? At the same time, the rise of the digital economy is offering ,millennials other options. I mean, you could say that inflation over time will fluctuate, but not by 20% in a day. That's --. Returns as of 01/21/2021. Unlike their parents, Millennial don’t have faith in traditional financial services, due in part to the financial crisis of 2008, a deluge of  . It's really gone beyond just banks, and it's more about tech companies partnering with banks. The unemployment benefits, in a lot of cases, were still going onto the third quarter, for example. For Matt Frankel, I'm Jason Moser. If approved, they're going to be a bank. Another really interesting part of the business is the Galileo Financial that they acquired in 2020. And of course, soon Robinhood itself will go public, now only being offered in the pre ipo markets. Stay up to date on the latest stock price, chart, news, analysis, fundamentals, trading and investment tools. A SPAC goes public, it has no business operations when it goes public. They raised all this money, the company has no operations other than having this giant bank account with money, and they're using it to take SoFi, which is a popular financial company, public. 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