Social Finance Inc., the online-lending platform that helps people refinance student loans, is in talks to raise about $800 million in a new round of capital, people with knowledge of the matter said.
The financing would value the San Francisco-based company, known as SoFi, at about $3 billion, said the people, who asked not to be identified because the process is private. The total size of the round and valuation may still change, the people said.
SoftBank Corp. has been in talks to invest in this round, the people said. The Tokyo-based telecommunications giant got clearance from the Federal Trade Commission for a potential investment in SoFi earlier this month, according to a filing on the agency’s website that didn’t include the size of the transaction. The FTC reviews mergers and investments for antitrust reasons.
Debra Jack, a spokesman for SoFi, declined to comment, as did a San Francisco-based representative for SoftBank.
SoFi started four years ago as a peer-to-peer lending company -- matching lenders and borrowers without a bank as an intermediary -- for Stanford University students and graduates. Funds were crowd-sourced from the school’s alumni. In June, SoFi announced that it has funded $3 billion in loans over the past three years and that it’s become the largest provider of student-loan refinancing in the U.S. It has been broadening its offerings to include mortgages and personal loans.
The increasing number and growth of alternative lenders has led to more competition and the potential for greater regulation. Both LendingClub Corp., which primarily arranges consumer loans over the Internet, and small-business lender On Deck Capital Inc. are trading below the price at which they each went public last year.
As of March, SoFi was preparing for an initial public offering that would value the company at $3.5 billion, people with knowledge of the matter said then.
Investors in prior rounds include Third Point Ventures, Wellington Management Co. and Discovery Capital Management.