SoftBank provides fresh $1-bn funding for US student loan marketplace

Social Finance, Inc (SoFi) a US-based student loans marketplace for lenders and borrowers, announced yesterday that it had secured a further $1 billion in fresh funds led by Japanese telecom giant SoftBank.

SoFi called it the ''largest single financing round in the fintech space to date.''

SoFi however was still not as well known as a number of other startups of its size. A post-money valuation had not been disclosed, but it had now raised a total $1.42 billion to date.

Among the existing investors who returned for this round are Third Point Ventures, Wellington Management Company, Institutional Venture Partners, RenRen, Baseline Ventures, and DCM Ventures.

According to SoFi the fresh funds would be used to accelerate growth by helping it bring to market ''new products and experiences.''

According to the company's chief executive and cofounder, Mike Cagney, the goal was to emerge as ''the most trusted financial services partner in the US.''

Since the launch of the student loans space in 2011, SoFi had expanded into new offerings including mortgages, mortgage refinancing, and personal loans. It said it had now funded over $4 billion in loans and expected to surpass $6 billion by the end of this year.

Other investors in SoFi, include private equity firm Third Point.

According to a joint statement issued by SoftBank and SoFi the Series E funding round would accelerate SoFi's growth as a financial services partner for consumers disenchanted with traditional banking.

SoftBank, has been an investor in tech startups for a long time, and counts Alibaba Group Holding Ltd and Yahoo Japan Corp among in its portfolio.

In a recent move it led a $500-million investment in Indian online marketplace Snapdeal in August, and had put $250 million into Singapore-based ride hailing app GrabTaxi at the tail end of last year.

In a separate statement, SoftBank said it had raised its stake in US mobile phone carrier Sprint Corp to 83.19 per cent from 81.99 per cent, less than two months after its last incremental purchase.

The purchases were under the close watch of investors as a holding of 85 per cent could end up delisting Sprint under New York Stock Exchange rules.

According to SoftBank it did not expect to reach 85 per cent.