Jan 7 (Reuters) – Start of online loan Social Finance Inc (SoFi) is close to a contract to go public through a merger with Social Capital Hedosophia Holdings Corp V, a blank check construction company led by venture capital investor Chamath Palihapitiya, people who know him said the affair Thursday.
The deal would value SoFi at more than $ 6 billion and could be announced in the coming days, the sources said, warning that negotiations could still fall and that the terms could be changed.
The sources requested anonymity as the conversations are confidential. SoFi and Social Capital did not immediately respond to requests for comment.
Social Capital Hedosophia V is one of three special purpose construction companies (SPACs) backed by London-based US investor Palihapitiya and Ian Osborne who are currently looking to buy.
SPAC is a shell company that raises money in an initial public offering (IPO) to merge with a private company that goes into public trade as a result.
They have emerged as a popular IPO option for companies, giving way to going public with less regulatory scrutiny and more certainty about the valuation received and money raised.
Palihapitiya has become one of the most prolific sponsors of SPACs, uniting them with a range of companies, from space tourism company Virgin Galactic Holdings Inc to Opendoor Technologies Inc.’s home sales platform.
Calosoph Social Hedosophia V raised about $ 800 million in IPO on the New York stock exchange in October.
Founded in 2011, San Francisco – based SoFi came to the point of needing banks to recover from swearing in of consumer lenders after the 2008 financial crisis.
It started with refinancing student loans and expanded to mortgages and personal loans. The company said in October that it had obtained a start-up, unconditional approval from the U.S. Office of the Regulator of Currency in its application for a national bank card. The company has also gone out to stock trading accounts and cash management.
Reuters reported in December that SoFi had held talks with SPACs about a merger. (Reporting by Joshua Franklin in Miami, Anirban Sen in Bangalore and Krystal Hu in New York; Editing by Steve Orlofsky)