Social Finance (SoFi), a US-based crowdsourcing platform for alumni to provide loans to students, has raised $77.2m in its series B round from a consortium including Chinese-language social network Renren. Renren, which floated on the New York Stock Exchange in May last year, said it invested $49m of the round. The other members of SoFi’s B round are venture capital firms Baseline Ventures and DCM, which invested in Renren ahead of its initial public offering at $14 per share to raise $800m. Jospeh Chen, executive chairman of Renren, said: “The investment in SoFi represents our continued efforts in leveraging our social and demographics expertise. As a pioneering company building social infrastructure over the internet, we have closely observed and participated in the transformation of other online vertical businesses that leverage social to productize, market, distribute and scale. “With gaming and e-commerce socialized, as exemplified by social gaming and social commerce, we expect the next wave will be finance and education; SoFi lies at the nexus of that revolution.” SoFi said it had moved towards becoming a national lender through state registration, created a broker dealer, expanded its product offering to include both in-school and consolidation loans, and expanded its presence to over 70 schools nationwide in the US. Last October, regulatory filing said Social Finance had raised $2m of a planned $10m round. Under the name SoFi Lending, the company last month said it had raised nearly $2.6m of its $10m round. (Both businesses have James Finnigan as a director, although last year’s filing also included Michael Cagney who founded the business at Stanford University’s School of Business, while SoFi’s other director is Ian Brady.) SoFi loans fixed at 5.9% with alumni receiving at least 5% and the company said it had provided more than $60m in loan applications and would commit more than $200m this year. In March, the US Consumer Financial Protection Bureau said student debt had passed $1 trillion. David Chao, co-founder and general partner of DCM and a board member of Renren, said: “Student loans are a major national issue that needs to be resolved. Through SoFi’s unique approach they are not only helping students through financial literacy and reducing their loan rates, but also enabling alumni to connect with their alma mater and truly give back to their community.”
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Renren invests $49m in SoFi
Sep 16, 2012 • Global Corporate Venturing
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