Social Finance Raises $77 Million to Address Student Loan Crisis

  Social Finance Raises $77 Million to Address Student Loan Crisis

 Lending Solution Helps Students by Providing Lower Loan Rates and Connecting
              Alumni Investors to Student and Graduate Borrowers

Business Wire

SAN FRANCISCO -- September 12, 2012

Social Finance Inc. (“SoFi”) today announced that it has raised $77.2 million
in series B funding led by Baseline Ventures and joined by DCM and Renren Inc.
(NYSE: RENN), China’s largest social networking site. SoFi is an innovative
lending solution that gives students access to lower loan rates than Federal
Direct and PLUS loans with similar borrower protections by fostering social
and economic connections with alumni investors. The new capital will be used
to help SoFi grow its alumni investor base and reach new student and graduate
borrowers as it expands beyond 78 schools this fall.

“With more students applying for loans for post-secondary education coupled
with state budget cutbacks for higher education and a federal loan market that
can punish good borrowers, the student loan and debt crisis is getting worse
before it’s going to get better,” said Mike Cagney, CEO of Social Finance.
“Through SoFi, we have been able to create a whole new market that gives
students better alternatives to fund their education while strengthening ties
to their alumni community.”

The SoFi program works as a dedicated lending fund that offers students a
better fixed loan rate than today’s unsubsidized Federal Direct and PLUS
loans. At the same time it enables alumni to connect with their alma mater
while earning an attractive return. The program also fosters interaction
between students and alumni through a unique social platform that combines
on-line and off-line connections that facilitate financial literacy, career
mentoring and in-school project assistance – ultimately helping to reduce
lending rates and lower loss rates for students.

To date, SoFi’s lending program is available in 78 schools ranging from large
universities such as Stanford and University of Michigan to smaller colleges
such as Smith and Swarthmore. It will expand beyond 78 schools this fall. SoFi
has generated more than $60 million in loan applications and is on a path to
commit more than $200 million in student loans in 2012.

“When taking the current and foreseeable macro environment into account, there
is a massive opportunity for SoFi to disrupt the entire finance market,” said
Steve Anderson, founder of Baseline Ventures. “Alumni across the country want
to be more involved with their universities and many have savings sitting on
the sidelines earning no interest. At the same time students need lower loan
rates to make college more affordable and need help with career decisions and
mentoring. SoFi makes the economics work for everyone: students benefit from
lower rates and alumni support, and alumni earn better returns and add value
to their schools through SoFi’s community lending engagement model.”

In March, the Consumer Financial Protection Bureau announced that student debt
had passed $1 trillion. In addition, a recent report from the Federal Reserve
Bank of New York revealed that the delinquency rate for student loans, which
is currently at 8.9 percent, increased during the second quarter of 2012. This
compared to the delinquency rates for mortgages (6.3 percent), credit cards
(10.9 percent) and auto loans (4.2 percent) which all decreased.

“There are very few companies that do social good while also leveraging next
generation financial and social networking services,” said David Chao,
co-founder and general partner, DCM. “Student loans are a major national issue
that needs to be resolved. Through SoFi’s unique approach they are not only
helping students through financial literacy and reducing their loan rates, but
also enabling alumni to connect with their alma mater and truly give back to
their community.”

“As a pioneering company pushing the potential of social infrastructure, we
closely observe and participate in other online businesses that are leveraging
‘social’ to create, market and distribute products at scale,” said Joe Chen,
CEO of Renren. “SoFi lies at the nexus of the social revolution, which began
with social gaming and social ecommerce – and is now poised to transform
finance and education.”

About SoFi

Located in the Presidio in San Francisco, SoFi was started by a team of
Stanford Graduate School of Business (GSB) students in the fall of 2011.
SoFi’s inaugural loan program was a $2 million pilot at the GSB that fall.
Since then, SoFi has moved toward becoming a national lender via state
registration, created a broker dealer, expanded its product set to include
both in-school and consolidation loans, raised significant capital to fund
loans and expanded its presence to more than 78 schools nationwide. SoFi is
backed by a group of leading institutions including Baseline Ventures, DCM and
Renren. The company encourages interested students, alumni and investors to
visit www.sofi.com for more information.

About Baseline Ventures

Baseline Ventures is a seed-stage capital firm founded by Steve Anderson in
late 2006. Bringing his diverse experience from eBay, Microsoft, Kleiner
Perkins, Starbucks and Digital Equipment Corporation, Steve founded Baseline
to in order to help entrepreneurs build and grow their ideas into companies.

Since inception Baseline has invested in more than 60 companies and helped
more than 15 companies exit. Baseline is proud to be a seed investor
associated with such promising companies as Instagram (acquired by Facebook),
Twitter, Weebly, Formspring, Heroku (acquired by Saleforce.com), CoTweet
(acquired by ExactTarget), GeoAPI (acquired by Twitter), IndexTank (acquired
by LinkedIn), Rupture (acquired by EA), Sendori (acquired by Ask.com), Parakey
(acquired by Facebook), Versely (acquired by Cisco), Aardvark and DocVerse
(both acquired by Google) and Hunch (acquired by eBay).

About DCM

DCM is an early stage venture capital firm based in Silicon Valley, Beijing
and Tokyo with more than $2 billion under management. DCM has investments in
more than 140 technology companies across the United States and Asia and
provides hands-on operational guidance and a global network of business and
financial resources. DCM has backed industry-leading companies such as 51job,
About.com, Clearwire, eDreams, Foundry Networks, Kabu.com, Sling Media, SMIC
and VanceInfo as well as upcoming startups such as Bill.com, Bridgelux, Happy
Elements, PapayaMobile and Trion Worlds. Recent successes include China-based
IPOs: Renren, BitAuto, DangDang, Luxin and VIPShop and US-based M&A and IPOs:
Fortinet, PGP (Symantec) and Sandforce (LSI).

About Renren

Renren Inc. (NYSE: RENN) operates the leading real name social networking
internet platform in China. It enables users to connect and communicate with
each other, share information and user-generated content, play online games,
listen to music, shop for deals and enjoy a wide range of other features and
services. Renren's platform includes the main social networking website
Renren.com, the online games center game.Renren.com, the social commerce
website Nuomi.com and the video-sharing website 56.com. Renren had
approximately 162 million activated users as of June 30, 2012.

Contact:

SoFi
Julie Haddon, 415-490-6425
jhaddon@sofi.org
or
DCM
Annika Jensen, 415-516-3530
annikalamka@sparkpr.com