SOFI is the one
My name is Fine_Ill_Sign_Up and I'm a degenerate-a-holic. I feel compelled to write this post today for a few reasons. One is that i've been a SOFI member for several years now. Two is that i've worked in consumer digital banking and investing for about 10 years now. In fact i'm currently working on taking a digital bank division to market for on of the largest banks in the country. Three because I co-founded a company that created stock market analytical software for individual investors. Four is that i'm YOLO and Sofi and could really use some returns that also screws short sellers at the same time (so sweet it is). Given that quartet of unimpressive credentials I do feel like I have a point of view worth listening to when it comes to SOFI.
I'm Yolo on SOFI for the following reasons:
- Rare investment opportunity – i've been investing for a dozen years now and i'll say it is very RARE to find newly public companies that 1. will turn a profit within a few years of going public 2. has incredible growth in revenue and customer base 3. has superstar backers like Chamath and Noto 4. are industry disruptors 5. is part of a very hot industry (FinTech) 6. has amazing products and features 7. genuinely cares about the well being of their customer base. SOFI HAS ALL OF THAT. I view SOFI as a near guarantee that if i'm patient and wait for 5 years I will 5X my investment at minimum (that might happen sooner if you other degenerates get ahold of it :)). The sky is the limit for SOFI. They are just getting started and focused on the consumer banking space. They can keep expanding and dominating in that space then expand into other areas just like Square. They could become more of a lifestyle company rather than a digital bank. They could also expand into new markets like Europe and South America. This is a bit of speculation but they have the backers, leadership, brand, and success to do this and I think they will. They already started to do it with the Galileo acquisition.
- Speed to Market – They have an unheard of ability to take digital banking products and features to market QUICKLY. Banking products and features are incredibly complex. Behind the scenes banks have to adhere to hundreds or regulations and laws and the number of systems and technical capacity you need to take a product to market is massive. It takes close coordination between technology, operations, marketing, products, governance as well as numerous vendors to get it done right. As a bank continue to grow it becomes increasingly more complex because you then have to fit new products into the existing banking ecosystems which means dozens of integrations into other systems and data repositories. SOFI takes products to market one after the other after the other. It seems like every few months they have a new great product of feature released. This speed is insane. I'm working for one of the largest banks in the country and it has literally taken us over 1.5 years to just take a digital checking account to market, and that's the minimum viable product. Within a relatively short amount of time SOFI has created a full consumer banking product offering. They have personal loans which are a very hot and growing market right now, a money management account, investment options, student loans, Home equity loans, credit cards, and insurance. Whether they have built it themselves (which is that case for most of their products) or partnered with another company to offer it to their customers, it is available and the product offering is high quality.
- Differentiation Features – Almost every day at work I reference SOFI as the premier example of digital banking features. They are just getting started and there's still so much room for opportunity. One of the biggest under the radar features that I think is going to pay of in a massive way for SOFI is their rewards program. Travel companies have mastered the rewards program game for many years now and other industries are starting to catch on. Big banking is far behind with the exception of SOFI and a few others. Sure you can go to Chase and get a bonus for creating a checking account, but you cant earn points and participate in a rewards PROGRAM and continues to engage you over time. It's never before seen in banking and members can get points for various activities like reading articles or just logging in. It's brilliant and the program is relatively new so I think it will grow into the best banking rewards program ever. Another great feature is Relay which basically tracks net worth and spending. This is pretty standard across the industry but it's not easy to do and SOFI has done it well. Another is robo investing and self -directed investing options. I have the robo invested Roth IRA with SOFI and my performance significantly has outperformed the market and i'm really happy with the user experience. These are just a few examples of dozens of great features that would normally take other banks quarters if not years to take to market. SOFI ability to create stickiness among their customer base is top-notch and it creates an environment where it would be a rarity for someone to close their relationship and move to another bank.
- Free member benefits and social activities – I love this about SOFI. They actually CARE about their members financial well-being. They offer free services like life coaching, financial planning, and career coaching to their members and host free social events for people to network and have a a great time. The social play is going to pay off huge. It creates stickiness like I mentioned earlier, betters the lives of their members, and changes the banking game because no one else does this that I know of. I've taken advantage of these services and i've been really impressed with the quality and the fact that they are completely free to me.
- Galileo – SOFI acquired Galileo outright which is a platform that DOMINATES the banking-as-a-service ecosystem. 90% of all digital banks in country use Galileo as well as 70 of the top 100 Fintechs. Galileo has major expansion plans into new markets and it is currently experience around 100% growth. Think for just a second on if Galileo went public individually. Imagine the valuation that it would have given how how the Fintech market is right now. I'm not going to pretend to be an expert on their offering but the market share domination is impressive. BLEND who just announced they have achieved a $4 billion dollar evaluation has nowhere near the market share that Galileo has. I can tell with with 1000% confidence that 90% of all digital banks use Blend. Comment below how much you think Galileo would be valued at if it went public on it's own. Keep in mind SOFI's current valuation is only $13b.
- Catch all for the other reasons – other reasons i'm bullish on SOFI is the fact that their core product was the student loan offering so the majority of their customer base was acquired in college or right out of college which means SOFI can retain these members for their entire life span and be closely intertwined into their financial journey. SOFI is also in the process of obtaining their own banking charter which significantly decreases the cost of doing business. Another is their referral program. Members are rewarded for referring other members for their entire product offering. I alone have referred over 5 people to join SOFI and I literally preach the good word on SOFI on a weekly basis to my network and friends.
To finalize my thoughts, I am so damn jazzed about this investment opportunity and I wanted to give you all some insight into my impression of SOFi from working in digital banking and being a SOFI member. I hope you all do your own due diligence and if you feel confident about SOFI then I strongly encourage you to trust your gut and play the long game with this one because it will pay off. Much love and luck to you all.
Submitted July 22, 2021 at 04:11AM by Fine_Ill_Sign_Up
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