SoFi Set to Acquire Fellow FinTech Galileo
Even in the face of a pandemic, FinTech marches on. Not only have we seen firms reporting new funding rounds during these challenging times but we have also seen some online banking offerings experiencing increased sign-ups. Now there’s more good news for the industry as the streak of acquisitions we’ve seen so far this year has extended by one.
Last week, SoFi (short for “Social Finance”) announced plans to acquire Utah-based Galileo Financial Technologies. The $1.2 billion deal will be comprised of both cash and stock. Galileo is expected to operate as an independent subsidiary of SoFi with current CEO Clay Wilkes continuing on in that role.
Galileo is a digital payments platform known for their APIs. Through those APIs, the company processed more than $53 billion of annualized payments volume in March 2020 — compared to $26 billion in September 2019. Not surprisingly, SoFi has also integrated Galileo’s platform into some of their products.
The acquisition is the latest development in what has proven to be a big year for SoFi. Earlier this year they announced a new partnership with Mastercard that would enhance their SoFi Money cash management accounts. In recent months the company has also expanded their offerings to include commission-free stock trades, cryptocurrency trading, and launching their own ETFs. Outside of the world of finance, SoFi also made waves when it announced that it had secured the naming rights to the new Los Angeles stadium that will be home to the Rams and Chargers (at some point).
In a statement regarding the acquisition, SoFi CEO Anthony Noto acknowledged the company’s growth and widening of scope, noting, “SoFi has established itself as a leader in the fintech sector, providing our more than one million members a full array of financial products to help them get their money right. The response by our members to our innovation across borrowing, saving, spending, and investing has motivated us to think bigger, bolder and more expansively given the insatiable consumer appetite for financial services innovation.” He went on to discuss how the acquisition supported that vision, saying, “Together with Galileo, we will partner to build on our companies’ strengths to drive even greater financial technology innovation, making those products and services available to both current and future partners. While we march forward on our mission to help people achieve financial independence through our own direct efforts, with Galileo, we can enable a broader ecosystem of companies to join us in helping the world achieve financial independence.” As for Galileo, their CEO Wilkes expressed enthusiasm for joining the SoFi family, stating, “We’re excited to work with SoFi to build on the services that have made Galileo the leading supplier of infrastructure services to leading financial, technology, and fintech companies. With the help of SoFi, we intend to continue to grow with and support all of our existing clients and the product roadmaps that they have defined.”
As noted earlier, SoFi’s purchase of Galileo continues an emerging trend of FinTech acquisitions. Other recent notable transactions include Visa’s purchase of Plaid and Intuit’s acquisition of Credit Karma. Of course this deal is also big news for SoFi, which seems to be on a real winning streak as of late. Could this buy help continue that? At this point, it certainly seems likely.