Chamath Palihapitiya’s SPAC to Take SoFI Public

Posted on 01/07/2021

Social Finance, Inc. (SoFi), an online lender, has entered into a definitive agreement with Social Capital Hedosophia Holdings Corp. V, a publicly traded special purpose acquisition company, to bring a major consumer-focused financial technology business to the public markets. The transaction values SoFi at an equity value of US$ 8.65 billion post-money. SoFi received preliminary, conditional approval from the U.S. Office of the Comptroller of the Currency (OCC) for a national bank charter in October 2020. If SoFi obtains final regulatory approval to own a bank, it would have a lower cost of funds to further support SoFi’s growth. SoFi delivered over US$ 200 million in total net revenue in the third quarter of 2020.

On January 7, 2021, Social Capital Hedosophia Holdings Corp. V announced that, concurrently with the execution of the Merger Agreement, it entered into subscription agreements with certain investors (collectively, the “PIPE Investors”) pursuant to which, on the terms and subject to the conditions therein, the PIPE Investors have collectively subscribed for 122,500,000 shares of SCH Common Stock for an aggregate purchase price equal to US$ 1,225,000,000. The PIPE is being led by Chamath Palihapitiya, Founder and CEO of Social Capital Hedosophia Holdings Corp. V, and Hedosophia, who are together contributing US$ 275 million; institutional investors comprise the remaining US$ 950 million of the PIPE, including funds and accounts managed by BlackRock, Altimeter Capital Management, Baron Capital Group, Coatue Management, Durable Capital Partners LP, and Healthcare of Ontario Pension Plan (HOOPP).

T. Rowe Price is also investing US$ 370 million into the deal.


Connaught acted as financial advisor, Credit Suisse acted as financial advisor, capital markets advisor and placement agent, and Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisor to Social Capital Hedosophia Holdings Corp. V. Citi and Goldman Sachs & Co. acted as financial advisor and placement agent, and Wachtell, Lipton, Rosen & Katz and Goodwin Procter LLP acted as legal advisors to SoFi.

    Get News, People, and Transactions, Delivered to Your Inbox