SoFi Fell Short of Ambitious Lending Goal During Tumultuous 2017By and
Former CEO targeted $17.5 billion in new loans for last year
Firm struggled with departures, sexual-harassment allegations
Social Finance Inc. set an internal goal of lending more money in 2017 than it had in the previous five years combined. It was an aggressive target and one that counted on everything going exactly right.
The Silicon Valley lender, which focuses on wealthy borrowers, missed its goal of $17.5 billion in loans by 26 percent, people with knowledge of the matter said, as the company battled executive departures, sexual-harassment allegations and the perception of a toxic-workplace environment.
Instead, the San Francisco-based firm, known as SoFi, made $12.9 billion in new loans last year, Ashish Jain, senior vice president of capital markets, said at a Jan. 23 event. Spokesman Jim Prosser told Bloomberg the company’s true goal for 2017 was $13 billion in new loans, and that the higher projection was merely a “stretch” figure that the firm could’ve reached if “things went incredible.”
Stretch figures weren’t uncommon at the company under Mike Cagney, its co-founder and chief executive officer who left late last year amid company turmoil, said the people, who asked not to be identified discussing internal matters. Cagney often set lofty goals to go along with the large ambitions he had for the startup, which began by refinancing student loans but has expanded into mortgages, personal loans, wealth management and other financial products.
The $4.6 billion miss came during a year SoFi weathered several departures, including Cagney, following claims of sexual harassment at the well-financed startup that last year investors valued at more than $4 billion. Despite falling short on loan volume, the firm still met its revenue goal by charging higher rates, one of the people said.
The company has since retreated from plans to expand overseas and pulled an application to start a bank as it battled a flurry of negative headlines and souring sentiment among some borrowers.
Last month, SoFi hired Anthony Noto, 49, formerly Twitter Inc.’s chief operating officer, to be its new CEO. He’s scheduled to start next month, but sat in on a board meeting earlier this week and has been seen in the office, one of the people said.