SoFi plans new lending products and move into stock trading
Social Finance Inc. plans to expand the types of loans it offers and broaden its product lineup, allowing customers to trade stocks and exchange traded funds on its platform this year, according to a letter sent to investors.
The move would generate more competition for other financial technology startups, including Robinhood Financial LLC, Betterment LLC and Wealthfront, which have been offering digital customers low-cost investing options for years.
While the company didn’t disclose revenue figures for the quarter or the full year, SoFi’s volume of loans, its most lucrative offering, continued to decline, falling to $2.24 billion from $2.5 billion the prior quarter and $3 billion in the quarter before that.
“As part of our SoFi Invest plans, we released an alpha version of our new brokerage platform, inviting employees and select members to buy and sell individual stocks and ETFs with the tap of a button,” Chief Executive Anthony Noto said in the letter, which was obtained by Bloomberg. “We are iterating quickly to grow and scale our invest offerings meaningfully throughout the year. SoFi Invest is now available to everyone in the app,” he added.
A SoFi spokeswoman declined to comment on the letter but said that the company has already begun gradually rolling out these offerings and will continue to develop them.
The San Francisco-based startup, founded in 2011, first made a name for itself by offering student loan refinancing for college graduates at prestigious universities. It has since signed up more than 1 million people for its products, which include bank accounts, mortgages and personal loans.
“We focused on quality over quantity and optimized the loan business for per-unit economics,” Noto wrote in the letter, adding that the firm is also putting growth over profitability as it continues to expand its offerings and member base.