Key insights
- SoFi launched Big Business Banking, a platform for managing both fiat and crypto, potentially streamlining operations for enterprise partners. While SoFi's stock has declined recently, the platform's 24/7 availability and integration with blockchain networks like Solana could attract new clients and boost revenue. The impact on the broader US equity market is limited but positive for fintech innovation.
SAN FRANCISCO - SoFi Technologies (NASDAQ:SOFI) announced the launch of SoFi Big Business Banking, a platform that enables enterprise partners to manage both fiat and cryptocurrency banking through its nationally chartered bank. The $19.9 billion fintech company has been profitable over the last twelve months, though its stock has declined roughly 40% over the past six months.
The platform allows companies to hold deposits, move money, and settle transactions 24/7 within SoFi’s regulated banking infrastructure, according to a press release statement. The service supports payments in fiat currency, SoFiUSD, or selected cryptocurrencies.
SoFi Big Business Banking offers regulated business deposit accounts, real-time API-driven payments available around the clock, and digital asset capabilities including support for minting and burning SoFiUSD with instant conversion between fiat and digital assets. The platform provides direct access to the Federal Reserve.
"To be competitive businesses today must operate in a global, always-on environment 24 hours a day, 7 days a week, while legacy banks typically still operate 9 to 5, Monday to Friday," said Anthony Noto, CEO of SoFi.
Initial participants include Cumberland, Bullish, BitGo, B2C2, Fireblocks, Wintermute, Galaxy, Jupiter, Mesh Payments, and Mastercard. The platform is expected to leverage Solana alongside other blockchain networks.
SoFi reported 13.7 million members and stated that its technology platform Galileo serves 128 million global accounts. The company posted revenue growth of 35.6% in the last twelve months with an 83% gross profit margin. According to InvestingPro analysis, the stock currently appears overvalued relative to its Fair Value. Investors can access detailed valuation metrics and Pro Research Reports covering SoFi alongside 1,400+ other US equities on the platform.
The platform aims to reduce the need for companies to use multiple providers for fiat and cryptocurrency services by offering integrated financial operations through a single interface.
In other recent news, SoFi Technologies announced a significant expansion of its Loan Platform Business, securing new commitments exceeding $3.6 billion. The partnerships include $1 billion from a global bank, $600 million to be delivered to an insurance group over a 12-month period, and up to $2 billion over two years with a top-five global private asset management firm. Despite this expansion, SoFi shares experienced a decline of 4.3%. Mizuho reiterated an Outperform rating on SoFi, maintaining a $38.00 price target, following these developments and a short-selling report that raised concerns about the company’s financial practices. Goldman Sachs also reiterated a Neutral rating with a $25.00 price target, reflecting a cautious stance amid the company’s growth efforts. Meanwhile, Robinhood Markets is facing competition from ETrade, a Morgan Stanley platform, which is reportedly set to lead the sale of SpaceX shares to retail investors in the anticipated IPO. This move could potentially give ETrade an advantage over Robinhood in attracting smaller-ticket U.S. retail investors. These developments highlight ongoing strategic shifts and market positioning efforts by both SoFi and Robinhood.
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