Why did you decide to go public via spac and with chamath palihapatea's vehicle in particular, um, a certainly controversial figure in silicon valley sure we were in the process of doing a private financing round, which we ended up, closing with t row price On december 30th, and as we were meeting with investors, some of them thought that we should consider going public at that point in time, either via a regular ipo or a spac.
The reason why a spec makes a lot of sense for sofi is a couple of factors. First, we can sit down with investors over a longer period of time and educate them before we become a public company. So we spent the last two weeks.
Educating investors in order to raise the pipe and we & # 39. Ll spend the next 30 to 45 days, educating a broader group of institutional buy-side investors on the sofi story. We have a very big vision and we're, investing meaningfully in capturing that opportunity to try to be a winner.
Take most i mean it's. Important investors understand the magnitude of the investments we & # 39, ve made the benefits and and what will happen over the next 10 years um. The second reason why it's beneficial for us is deal certainty.
We're, a consumer finance brand and a regular ipo doesn't have the same level of deal certainty as a pipe and a spec. We, you know closed a significant amount of incremental capital um in this back process: 1.
2 billion dollars of additional pipe proceeds on top of the 370 million dollars, so that pipe is is closed and we'll fund um when we actually do the despacking Process so much more deal certainty than a regular ipo and then last we're able to give forecasts over um, just not the near term but the next couple of years, and given the fact that we have three different businesses, we have a lending Business, we have a technology platform and then financial services products they're all at different growth rates and different levels of profitability.
So being able to take investors through that level of detail is also conducive to ensuring the value of the company is best reflected um in the price that's being paid. So those are the three critical reasons anthony you know.
On one hand, you're, a technology company. On the other hand, you're, a finance company and finance does not tend to get the valuations that a technology company does so now that you're going to be entering public markets.
How do you expect investors will value you yeah? I mean having better sell side, research analysis and a banker covering the internet space broadly defined. I have found that the valuations of companies is highly correlated with a return measurement.
In some cases it's, return on invested capital and others it's returned on equity and companies that can drive, outsized returns get higher multiples, and i think we will show over time that we're on a path To an outsized multiple, because our cost based is lower than traditional finance companies and because our entire service is being delivered through a technology platform.
It drives a higher level of return than a traditional financial services company, and i think we still have to prove this to investors. I think we'll, show over time that we can have outsized returns, because we are leveraging technology as the main distribution vehicle for our product to consumers.
We're. One of the only places that i know of that has a complete comprehensive set of products across borrow, save, spend, invest and protect on a mobile platform and as the awareness of that grows and our scale grows, uh we & # 39.
Ll have outsized returns, so you know when you look at your presentations on the deal today. It's clear that your ambitions are very big. You want to be an industry leader, similar to how amazon is in its own industry or spotify is who are you going after yeah? We're, going after above average household income about a hundred thousand dollars total household, so that could be two people contributing to that with very strong credit um, that's, our core target.
We are expanding beyond that as we launch products that are more mainstream like sofi money, uh, and so, if i invest, but our core target remains a a higher earner with very strong credit that we call high owners not well served.
The financial services world has really left this group of people behind as big banks and financial institutions have optimized what businesses they're in based on return on equity goals, as opposed to what members really need, and our value proposition is quite simple.
We want to be there for every one of the major financial decisions someone makes in their lives, because if we're not and they make a mistake on how they decide to fund their college education or they overpay for a home or they don't, invest in their 20s; it'll, be really hard for them to catch up.
We need to be there for every one of those decisions in order to help them get their money right. We can't just do borrowing we can't just do investing, and so our goal is to have a comprehensive one-stop shop.
So we're there for all the major decisions you'll, make in your financial life and all the day-to-day decisions as well, and that's. A very ambitious strategy - and i do agree with you. It's very similar to the broad-based approach that amazon took, and we similarly are doing it on one technology platform and we also have an enterprise offering, as we expose that technology platform to other companies in the sector.
Now, anthony sofi obviously has a very unique outlook into the health of american consumers and we see the economy and business undergoing so many major transitions at the same time that vaccines are rolling out slowly stimulus rolling out slowly, but still millions of people have lost their Jobs work is shifting remote work.
We're, going to be doing more of it. What is your outlook on the health of american consumers for 2021 yeah? There's, a lot of uncertainty out there i mean the global pandemic has had a devastating effect on many people for the first time in their lives.
Their financial success or financial income has gone to zero at no fault of their own um. Given the fact that we have such a diverse portfolio of products now in lending, we have home loans per unsecured, personal loans, we also have in-school college loans and then we have student loan refinancing and then we have a technology platform through galileo.
That's, a very large business, and we are also in credit card in that a brokerage product called sofi, invest and then sofi money that diversification of products has actually served the community of individuals very well, because people are stuck at home having to Do the financials at home - and you can do all that on your phone with sofi, and so while there have been soft spots within the market overall in the third quarter, we had record revenue and very strong profitability um because of the accelerating need of people to Have to do all these financial activities at their house, given the the risks of the of covet 19 outside of their homes um from an economic standpoint.
You know the government has done a very good job with stimulus, um. Obviously, the program that's coming out now is coming just in time and i think it'll, be very positive for the economy if there's additional stimulus packages throughout uh, the next quarter, but that has helped shore Up a lot of the balance sheets of uh of individuals,