Online lender Social Finance has raked in around $1 billion from its collective investors, bringing the startup's value to roughly $4 billion. The San Francisco-based firm raised that equity round in the last several weeks, according to Wall Street Journal reporting. If that valuation pencils out right, SoFi would be in the top 30 U.S. banks by market cap.
The round was led by SoftBank, a Japanese telecom firm. SoftBank was also an early Alibaba investor.
The new funding has roughly doubled SoFi's valuation since its last round in February. The firm claims that it is currently profitable but declined to release any financial specifics.
The lending company is the brainchild of Wells Fargo alumnus Michael Cagney, and the company's mission is simple: refinancing student loan debt, which has grown 70 percent since 2008.
With no physical locations, potential customers apply to the service on a computer or through a mobile app, and though SoFi functions like a bank, it isn't one, meaning it doesn't face increased capital requirements that banks have faced since the financial meltdown. SoFi also comes packing some unique underwriting stipulations — among the characteristics it cares about are the quality of the lendees' university (good universities get better rates).
SoFi has also dabbled in personal loans and mortgage loans with low down payments.
The biggest four U.S. banks combined have a market capitalization of more than $1 trillion, “and I think all of that is vulnerable,” said Cagney in a recent interview. “I’m going to go and get as much of that as I can.”