SoFi nabs another tech company in its quest to be a ‘one-stop shop’

SoFi Technologies is making another acquisition in its quest to become a one-stop shop for financial services.

The San Francisco company, which started as a lender that refinanced student loans and has diversified to offer other types of loans, investing, banking and more, announced on Tuesday that it is buying Technisys, a digital and core banking platform provider in Miami.

Bloomberg

The all-stock transaction is expected to close by the second quarter , and Technisys will operate as an independent subsidiary. Technisys shareholders will receive aggregate consideration of approximately 84 million shares of SoFi common stock worth about $1.1 billion.

SoFi has been working to strengthen its presence as a full-service competitor to banks — and its bid to, eventually, become a bank itself.

In 2020, SoFi purchased Galileo, a firm that helps challenger banks with payments and digital banking. In January, regulators approved its application to buy a community bank in California, affording SoFi a national bank charter. Its membership may also see a boost on the heels of the Super Bowl, which was played in SoFi Stadium in Inglewood, California.

“Technisys has built an attractive, fast-growth business with a unique and critical strategic technology,” Anthony Noto, SoFi's chief executive, said in a news release. “The acquisition of Technisys is an essential building block in delivering on our member-centric, digital one-stop-shop experience.”

In a research note, Wedbush Securities analysts said SoFi’s increasing brand presence was likely to drive member growth and that they expect its recently approved bank charter to accelerate earnings growth. Nevertheless, SoFi's stock dropped more than 9% after it announced the Technisys acquisition.

SoFi expects that combining Technisys’s platform with Galileo's will let the parent company offer new products and services and extend its customer base. Over the next few years, SoFi will transition from multiple third-party cores to a single cloud-based core owned and operated by Technisys. SoFi hopes the new technology will help it make more real-time decisions and improve its personalization efforts. It also aims to benefit from the geographic reach of Technisys, which does business in countries in South America that SoFi and Galileo have not penetrated.

“We believe that every multiproduct financial services company will need to transition off of older banking cores to cloud-native multiproduct cores like that of Technisys or risk being left behind,” Noto said during a conference call on Tuesday.

The acquisition is expected to boost revenue and increase cost savings. SoFi forecasts it will add $500 million to $800 million of revenue through 2025 and generate $75 million to $85 million in cost savings from 2023 to 2025.