SoFi, the San Francisco based personal finance company revealed in its latest announcement that it has acquired rival firm Galileo, Utah based digital payments company in a deal worth US$1.2 billion. This deal was part of SoFi’s efforts in expanding its financial service offerings in particular, the firm hopes to leverage Galileo’s API technology to boost its product portfolio. According to a report from CNBC, the deal has been structured in a way that required only US$75 Million in cash payment while the rest was split in form of US$875 million worth company stocks and US$250 million in shelter financing debt. SoFi was established back in 2011with student loan refinancing platform as its original product and it has since grown to accommodate a wide range of financial services and products in its portfolio which it provides via on online service. The firm has also become popular recently for its digital currency trading platform.
Galileo Financial Technologies, Inc was established in 2000 and is a fintech firm which specializes in digital payment processing service. Its well known product is its API technology which enables banks to connect with credit card processors. SoFi and Galileo first came into touch when SoFi opted to use Galileo’s service as payment processor for its product SoFi Money. Their relationship had since grown closer which led to acquisition talks and all this happened before covid-19 pandemic took hold of the global economy facilitating the merger to get completed despite ongoing crisis in financial services market. Owing to this merger, SoFi not only gains access to Galileo’s API technology but also an increased market base and global reach given the fact that Galileo caters to some of the multinational heavyweights in the financial services industry such as Robinhood, Chime, Monzo, and Revolut.
With access to best in class API technology, SoFi is now on path towards achieving its goal of providing its clients with access to critical financial services around the clock. The firm also gains several other advantages allowing it to participate on global fintech space with focus on reinventing and optimizing the working mechanisms behind modern digital finance. The announcement also stated that Galileo will continue to function as an independent entity regardless of this acquisition deal while it also gains its own advantages from this deal as SoFi’s economics and infrastructure are set to continue improving moving forward.
Speaking about this acquisition deal, Anthony Noto – CEO of SoFi, said “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”.
Speaking on same note, Clay Wilkes – CEO of Galileo added “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”.
