SoFi acquires Galileo in $1.2bn deal

June 2020 | DEALFRONT | MERGERS & ACQUISITIONS

Financier Worldwide Magazine

June 2020 Issue

In a deal designed to further establish itself as a leader in the FinTech sector, online personal finance company SoFi is to acquire payment processing solutions platform Galileo Financial Technologies for $1.2bn, comprising cash and stock.

The definitive agreement to acquire Galileo will extend the reach of SoFI’s products to other Galileo partners in the US and international markets, while offering diversification and scale to SoFi’s existing infrastructure. Galileo’s digital payments platform enables critical checking and savings account-like functionality via its powerful open application programming interfaces (APIs), providing companies with an easy way to create sophisticated consumer and B2B financial services.

Furthermore, new functionalities and services will further help Galileo’s current and new partners capture the secular shift of financial transactions from the physical-only to a multi-channel digital and physical platform.

“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,” said Anthony Noto, chief executive of SoFi. “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.”

Founded in 2000, Galileo has grown to become one of the largest payments processors and programme managers in North America. The firm is the only payments innovator that applies tech and engineering capabilities to empower FinTechs and financial institutions to unleash their full creativity to achieve their most inspired goals.

“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,” continued Mr Noto. “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.”

Founded in 2001, acquirer SoFi creates financial products and services that help people borrow, save, spend, invest and protect their money better, so that they can achieve financial independence and realise their ambitions, such as owning a home, saving for retirement and paying off their student loans.

“SoFi has built a very strong diversified financial services company focusing on a full suite of financial services,” said Clay Wilkes, chief executive of Galileo. “These are products that many of our leading fintech clients are asking for. Distributing products through our enterprise class API is the vision behind this combination. 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.”

The transaction is subject to regulatory approvals and other customary closing conditions. Goldman Sachs & Co. LLC and Citigroup served as financial advisers and WilmerHale acted as legal adviser to SoFi. Qatalyst Partners served as financial adviser and Dorsey & Whitney acted as legal adviser to Galileo.

Mr Wilkes concluded: “We are 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.”

Fraser Tennant