SoFi, the online lender that started out refinancing student loans, has inked a deal to acquire Zenbanx, a fintech company that gives SoFi the ability to offer checking accounts and credit cards, among other financial services.
According to a report, terms of the deal were not disclosed. When SoFi came on the scene in 2011, its business was focused on consolidating and refinancing student loans, but since then it has morphed into other lending products, including mortgages and personal loans. Currently SoFi has more than 230,000 customers and has raised $1.4 billion in funding, noted the report. The deal is expected to be valued at roughly $100 million when it closes later in February.
Zenbanx offers a mobile banking account that enables customers to save, send and spend money in multiple currencies both in the U.S. and abroad. Since it is not a bank, it teamed up with FDIC member Wilmington Savings Fund Society, which issues accounts for Zenbanx. With the buy, SoFi will be able to expand its business into other areas. The company’s founder is staying on in an executive role, while the staff of both companies will be combined.
“With Zenbanx joining SoFi, we’re moving one step closer to becoming the center of our members’ financial lives by adding SoFi deposit, money transfer, and credit card products to our offerings for members,” said Mike Cagney, CEO of SoFi, in the report.
In October, The Wall Street Journal reported SoFi was moving ahead with plans to roll out a life insurance product, reportedly acquiring licenses and inking a deal with Protective Life Insurance. According to the WSJ report, which cited documents and people familiar with the situation, SoFi has been moving to expand into other products, first starting with refinancing student loan debt. It now has included mortgages, personal loans, wealth management and, starting soon, insurance.
“We’re always looking at how to better help great people achieve success with their money, career and relationships, but we don’t have anything to announce at the moment,” a SoFi representative said in the report.
SoFi’s plan is to be the insurance broker and more quickly get a return on the investment it makes to acquire new customers, reported the WSJ.