Online lender SoFi is stepping up its efforts to take on America's banks by buying fellow fintech player Zenbanx, enabling it to offer checking accounts, credit cards and international money transfers. Financial terms were not disclosed.
SoFi launched in 2011, enabling graduates to consolidate and refinance their federal and private student loans. Since then, the company has expanded its offerings to include mortgages, mortgage refinancing, and personal loans.
The firm has proved a fintech success story, picking up in the region of $1.4 billion in finding and winning over more than 230,000 customers.
Now it is aiming to expand into other retail banking areas by teaming up with Zenbanx. Although terms have not been revealed, the deal is expected to be worth around $100 million when it closes later this month.
Founded in 2012 by former ING Direct CEO Arkadi Kuhlmann, Zenbanx offers a mobile banking account that lets people save, send and spend money in multiple currencies both domestically and internationally. The firm is not a bank, teaming up with FDIC member Wilmington Savings Fund Society, which issues accounts.
The deal gives SoFi a way to expand its business after a year in which many online lenders, including Lending Club, Prosper and OnDeck Capital, have struggled with tightening capital markets and regulatory issues.
Kuhlmann is staying on, assuming an executive role leading banking products at SoFi, and Zenbanx’s staff will also be joining the company.
Mike Cagney, CEO, SoFi, says: "With Zenbanx joining SoFi, we’re moving one step closer to becoming the center of our members’ financial lives by adding SoFi deposit, money transfer, and credit card products to our offerings for members."