SoFi is getting deeper in the financial-services field with the acquisition of Zenbanx, a mobile-banking startup for $100M. WOW! But it’s not “real” cash money, its SoFi stock which in its own way is not “real” money either. Still, Zenbanx gets a nice payday.
If you don’t know, Zenbanx is a mobile-banking startup and SoFi (Social Finance, Inc) is a big online lending company. SoFi is buying Zenbanx and with this $100M stock transaction it will push SoFi deeper into the financial-services sector. The purchase will give SoFi and new bank-account product offering checking and credit cards AND gets them into mobile banking via Zenbanx’s footprint in the US and Canada. Seems like a good fit for both.
“Social Finance Inc., the online lending company known as SoFi, is muscling further into the financial-services industry by acquiring mobile-banking startup Zenbanx.
SoFi is paying about $100 million in stock for Zenbanx’s technology, according to a person familiar with the agreement, which will serve as the framework for a new SoFi bank-account product that will offer services like checking and credit cards. The smaller startup offers a mobile account in the U.S. and Canada that lets people save, send and spend money in multiple currencies. Zenbanx customers will be transitioned to SoFi bank accounts when the new product is finished later this year, SoFi said.
Closely held SoFi started out in 2011 by refinancing student loans. Since then it has chased a broader audience, expanding into personal loans, mortgages, wealth management and life insurance. In 2015, the San Francisco-based company issued $5 billion in loans. That has grown to over $14 billion today. SoFi is betting the Zenbanx deal can help it reach new customers, who then may become users of its other personal-finance products.”