Who owns SoFi? How do they make money?

General
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What is the SoFi App?

The SoFi app is a mobile application developed by SoFi Technologies, Inc., a U.S.-based fintech company. It serves as a one-stop digital platform for personal finance, offering services such as borrowing (student loans, personal loans, mortgages), saving, spending (checking and savings accounts), investing (stocks, ETFs, crypto), and insurance. The app is designed to help users manage their financial lives seamlessly, with features like tracking credit scores, accessing financial planning tools, and exclusive member benefits. It is available for both iOS and Android devices.

Who Owns the SoFi App?

The SoFi app is owned by SoFi Technologies, Inc., a publicly traded company (NASDAQ: SOFI) founded in 2011 by Stanford Graduate School of Business students Mike Cagney, Dan Macklin, James Finnigan, and Ian Brady. The company is headquartered in San Francisco, California. Its ownership structure includes institutional investors, mutual funds, hedge funds, and individual shareholders. Major shareholders may hold significant stakes, as indicated by SEC filings (Schedule 13D/13G), but no single entity dominates ownership. The company is led by CEO Anthony Noto and governed by a board of directors with expertise in finance and technology.

How Does SoFi Make Money?

SoFi generates revenue through three main business segments: Lending, Technology Platform, and Financial Services. As of April 2025, 41% of its annualized revenues were fee-based, with the remainder primarily from interest-based income. Below is a breakdown of its revenue model:

  1. Lending (64% of net revenue in 2023):

  • SoFi originates loans, including student loans, personal loans, and mortgages, and earns money through:

    • Net Interest: Interest paid by borrowers on loans held by SoFi.

    • Securitizations and Whole Loan Sales: SoFi bundles loans and sells them to institutional investors (e.g., pension funds, insurance companies) at a premium, retaining some ownership for future cash flows.

    • Origination Fees: Fees charged when loans are issued, though SoFi often minimizes these to attract customers.

  • The lending division focuses on high-achieving individuals, using data-driven risk assessment to offer competitive rates.

  1. Technology Platform (Galileo and Technisys):

  • SoFi’s technology platform, powered by Galileo (acquired in 2020), provides infrastructure for fintech services, such as payment processing and card management, to other companies (e.g., Chime, Robinhood).

  • Revenue comes from:

    • Platform Access Fees: Charges for API-based services.

    • Interchange Fees: A percentage of each transaction processed through Galileo’s systems.

  • This segment is capital-light and supports 158 million technology platform-enabled accounts as of April 2025.

  1. Financial Services:

  • This segment includes SoFi Checking and Savings, SoFi Invest, SoFi Credit Card, SoFi Protect (insurance), and SoFi Insights (financial tracking tools).

  • Revenue streams include:

    • Transaction Fees: Small percentages from debit/credit card transactions (shared with Mastercard).

    • Management Fees: Annual expense ratios from SoFi’s ETFs (e.g., 0.19% or $1.90 per $1,000 invested).

    • Share Lending: SoFi lends out shares to short sellers, earning loan fees.

    • Payment for Order Flow: Revenue from sending customer trading orders to third-party market makers.

    • Interest on Deposits: SoFi earns interest by lending out client cash deposits to banks or financial institutions at interbank rates.

  • The Financial Services segment doubled its revenue to $303.1 million in Q1 2025, driven by innovations like SoFi Money and SoFi Invest.

  1. Other Revenue Streams:

  • Loan Platform Business: SoFi originates $1.6 billion in loans for third parties (Q1 2025), earning fees without holding loans on its balance sheet.

  • SoFi Plus Membership: A subscription plan ($10/month or free with direct deposit) offering enhanced benefits, contributing to fee-based revenue.

  • Partnerships and Referrals: Fees from loan referrals and insurance business offerings.

Key Financial Highlights (2024-2025):

  • Revenue: $2.67 billion in 2024, with Q1 2025 net revenue at $771.8 million (33% YoY growth).

  • Net Income: $498.67 million in 2024, with Q1 2025 at $71.1 million.

  • Fee-Based Revenue: Grew 67% YoY in Q1 2025, reaching $315 million.

  • Customer Base: Nearly 11 million members and 15.9 million products as of Q1 2025.

Critical Notes:

  • SoFi’s “Financial Services Productivity Loop” strategy drives growth by cross-selling products to existing members, with 32% of new products opened by current members in Q3 2024.

  • The company’s digital-first approach reduces overhead compared to traditional banks, but it faces competition from other fintechs like LendingClub and Upstart.

  • Regulatory risks exist, as seen in a 2018 FTC settlement over exaggerated savings claims, prohibiting misrepresentations until 2039.

For more details on SoFi’s subscription plans, visit https://x.ai/grok. For investor-related inquiries, check https://investors.sofi.com.

Disclaimer: Financial data is based on sources as of June 2025 and may change. Always verify with SoFi’s official reports for investment decisions.