Sofi Technologies, Inc. · NASDAQ:SOFI
Sofi Technologies — SPAC Merger (January 2021)
36 slides from Sofi Technologies's SPAC merger presentation, Jan 6, 2021
Slide 1: Get Your Money Right
Get Your Money Right Borrow, Save, Spend, Invest and Protect © 2020 Social Finance, Inc. Confidential Information. Do not copy or distribute. Advisory services offered through SoFi Wealth LLC. SoFi Money® is offered through SoFi Securities LLC. SoFi Lending Corp., CFL #6054612. NMLS #1121636.
Slide 2: Disclaimer
Disclaimer Confidentiality and Disclosures This presentation has been prepared for use by Social Capital Hedosophia Holdings Corp. V (“Social Capital”) and Social Finance, Inc. (“SoFi”) in connection with their proposed business combination. This presentation is for information purposes only and is
Slide 3: SoFi's Mission
SoFi's Mission To help our members (HENWS) achieve financial independence to realize their ambitions Note: HENWS stands for High Earners not Well Served who represent a significant portion of SoFi’s member base. ©2020 Social Finance Inc. PRIVATE AND CONFIDENTIAL INFORMATION | FOR INTERNAL USE ONLY |
Slide 4: Our job to be done: Get Your Money Right
Our job to be done … Get Your Money Right SoFi provides comprehensive solutions tailored to member’s unique needs to Borrow, Save, Spend, Invest, and Protect, and in turn helps the member “Get Your Money Right” If SoFi can help you Get Your Money Right, then SoFi can help you achieve financial indep
Slide 5: Why SoFi? Our Key Points of Differentiation
Why SoFi? : Our Key Points of Differentiation Everything we do must reinforce one of these four points of differentiation delivered with a MEMBER-centric approach & sensibility in order to: ✓ Build a TRUSTED RELATIONSHIP ✓ Show that our products are BETTER when used TOGETHER 1 Fastest way to do FAST
Slide 6: The SoFi Strategy: A member experience & full suite of products that leverages the FSPL
The SoFi Strategy: A member experience & full suite of products that leverages the FSPL Leveraging the financial services productivity loop (“FSPL”) strategy where building TRUST and a “RELATIONSHIP” in Money Invest the 1st product drives success in the next, results in Highest LTV & Lowest CAC resu
Slide 7: The winner takes most Fintech opportunity
The “winner takes most” Fintech opportunity remains ...and now is SoFi’s time © 2020 Social Finance, Inc. Confidential Information. Do not copy or distribute. Advisory services offered through SoFi Wealth LLC. SoFi Money® is offered through SoFi Securities LLC. SoFi Lending Corp., CFL #6054612. NMLS
Slide 8: Up for Grabs: 500M+ Accounts Across 4,700+ FDIC Incumbent Banks
Up for Grabs: 500M+ Accounts Across 4,700+ FDIC Incumbent Banks Top 10 legacy banks hold ~50% of 50% of Americans use more than one bank consumer’s 500M+ bank accounts for financial services 5+ Banks 4 Banks 7% 4% 11% 52% Top 15 Other Banks 10% Banks 3 Banks 11% 4 8% 1 Bank 10% 50% 2 Banks 4% 28% So
Slide 9: Consumers are left using multiple accounts given the lack of an integrated one-stop shop
Consumers are left using multiple accounts given the lack of an integrated one-stop shop on one digital platform Why Americans Use Multiple Banks is the only company providing this solution today in one app!! High Account Balances 6% Want Finances Want Spread Out Finances Lower Fees Spread Out 19% 2
Slide 10: World Class Management Team Combining Technology and Financial Services Expertise
And has a World Class Management Team that Combines Expertise in Technology and Financial Services Anthony Noto CEO Chris Lapointe Michelle Gill Maria Renz Jennifer Nuckles Clay Wilkes CFO Group Business Lead: Group Business Lead: Group Business Lead: Founder & CEO: Lending Money, Invest, Credit Car
Slide 11: SoFi Uniquely Offers a Full Suite of Financial Products All In One App
Sofi Uniquely Offers a Full Suite of Financial Products All In One App to help members get their money right!! Member-centric approach powers entire financial relationship resulting in cross-buy opportunity All launched within last 24 months Invest Home Loans In-School Loans Loans SoFi Home Money Re
Slide 12: Member growth is Accelerating & FSPL is working
Member growth is Accelerating & FSPL is working © 2020 Social Finance, Inc. Confidential Information. Do not copy or distribute. Advisory services offered through SoFi Wealth LLC. SoFi Money® is offered through SoFi Securities LLC. SoFi Lending Corp., CFL #6054612. NMLS #1121636.
Slide 13: On Track to Exceed 3M Members in 2021
On Track to Exceed 3M Members in 2021 Up 75% After 6 Consecutive Quarters of Accelerating YoY Growth Unique Members in thousands 75% 3,000 Year-over-Year Growth 1,718 1,501 1,204 1,086 976 864 704 759 629 653 // Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Tod a y 2021E YoY Growth 37% 50% 5
Slide 14: Nearly doubling our multi-product members to 775K
Nearly doubling our multi-product members to 775K Total Products: 2.3M ->4.0M Multi-Product Members: 400k -> 775K 775K 4,000K 77% Year- 95% Year- Over-Year Growth Over-Year Growth 2,255K 398K 1,971K 349K 1,579K 278K 1,372K 1,133K 214K 987K 852K 125K 98K 74K // // Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20
Slide 15: The SoFi Strategy: A member experience & full suite of products that leverages the FSPL
The SoFi Strategy: A member experience & full suite of products that leverages the FSPL Leveraging the financial services productivity loop (“FSPL”) strategy where building TRUST and a “RELATIONSHIP” in Money Invest the 1st product drives success in the next, results in Highest LTV & Lowest CAC resu
Slide 16: Multi-product Usage Leads to Best-in-Class Unit Economics
Multi-product Usage Leads to Best-in-Class Unit Economics and Greater Lifetime Value of Each Member A Money member cross buying to a loan increases total variable profit /member by $825 (+180%) due to no second acquisition cost. The extra profit can be invested in better prices (rates) and our diffe
Slide 17: 65%+ of Home Loans come from existing members
65%+ of Home Loans come from existing members driving ~$30 million in Q3’20 revenue on $1 million in acquisition marketing Note: Data as of September 30, 2020. Revenue refers to Adjusted Net Revenue © 2020 Social Finance, Inc. Confidential Information. Do not copy or distribute. Advisory services of
Slide 18: Home Loans Cross Buying momentum helped drive ~$30m in revenue on just $1m in acquisition marketing
Home Loans Cross Buying momentum helped drive ~$30m in revenue on just $1m in acquisition marketing ~65%+ of Home Loans are from existing members driving an incremental $5k in variable profit per loan due to no second acquisition cost Re-Launch Current Key Metrics Improvement (Q1’19) (Q3’20) Adjuste
Slide 19: Continued Momentum in Cross Buy is Leading to Better Unit Economics
Continued Momentum in Cross Buy is Leading to Better Unit Economics 24% of Products Sales Come From Cross Buy from existing members at significantly lower acquisition cost Q4’19 Q1’20 Q2’20 Q3’20 Q4’20 83% 72% 69% 69% 68% 66% 66% 63% 61% 61% 60% 45% 44% 35% 36% 32% 28% 28% 25% 23% 22% 22% 22% 21% 21
Slide 20: Approaching an inflection point in the Financial Services Productivity Loop
Approaching an inflection point in the Financial Services Productivity Loop 2021E ~4M Products Q3'20 Relay: 800K High ~2M Products Money: 969k Frequency, Low Member Relay: 318K Acquisition Invest: 866K Cost Money: 418K PL: 628K Invest: 334K SLR: 505K High LTV, PL: 489K Low SLR: 388K CC: 102K Frequen
Slide 21: SoFi's Technology & Operations Create Advantages for Our FSPL
SoFi’s Technology & Operations Create Advantages for Our FSPL in Faster Innovation, Lower Costs, More Data & Iterative Testing We built our Lending business full stack across tech & operations, giving us a competitive advantage in a multi-product strategy Our full stack tech & operations capabilitie
Slide 22: Tech platform accelerates SoFi FSPL and builds AWS of fintech
Tech platform accelerates SoFi FSPL, distributes SoFi products via Galileo partners, and builds AWS of fintech SoFi and Galileo are better together - accelerates SoFi Strategy, while also 1 helping expand Galileo’s products & services to the ~50M accounts of its partners Drive faster innovation to f
Slide 23: Galileo has seen 6 quarters of accelerating growth in total accounts
Galileo has seen 6 quarters of accelerating growth in total accounts Total Accounts in millions 50 36 30 25 20 21 17 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 YoY 8% 23% 30% 62% 75% 83% 131% Growth Note: Total accounts reflect open accounts at period end, including SoFi open accounts, regardless of
Slide 24: SoFi positioned to be the Winner Takes Most
SoFi positioned to be the “Winner Takes Most” Member focus ● Targeting high earners not well served (HENWS) ages 22+ predominantly earning $100,000+ HENWS High income, High FICO Score ● Uniquely offering comprehensive suite of Product offerings products and services in a sea of single point solution
Slide 25: Financials
Financials Driving accelerating revenue growth and margin expansion © 2020 Social Finance, Inc. Confidential Information. Do not copy or distribute. Advisory services offered through SoFi Wealth LLC. SoFi Money® is offered through SoFi Securities LLC. SoFi Lending Corp., CFL #6054612. NMLS #1121636.
Slide 26: Accelerating revenue growth in 2021 with strong incremental adjusted EBITDA margins through 2025
Accelerating revenue growth in 2021 with strong incremental adjusted EBITDA margins through 2025 Adjusted Net Revenue ($M) Adjusted EBITDA ($M) (2018A - 2025E) (2018A - 2025E) $1,177 $3,669 $788 $2,808 $484 $2,106 $254 $1,500 $980 $27 $621 $451 ($66) $241 ($149) ($227) '18A '19A '20E '21E '22E '23E
Slide 27: Our 3 Business Segments
Our 3 Business Segments Technology Financial Lending Platform Services • Student Loan Refi • Galileo • Invest • Relay • Personal Loans • 1/6th ownership of • Money • Protect Apex Clearing • Home Loans • Credit Card • In School Loans • Lantern © 2020 Social Finance, Inc. Confidential Information. Do
Slide 28: All at different stages in their growth trajectory & lifecycle
All at different stages in their growth trajectory & lifecycle Lending 25% CAGR Technology (2020-2025) Resulting in Platform 58% Margin diversification of: • Revenue 55% CAGR • Growth Rates (2020-2025) Financial 62% Margin • Interest Rate Exposure Services • Geographic Exposure 153% CAGR (2020-2025)
Slide 29: Diversified Revenue Streams
Lending Diversified Revenue Streams Tech Platform Financial Services 2020E Adj. Net Revenue Composition 2025E Adj. Net Revenue Composition 2% $11M 17% $103M 32% $1.2B 43% $1.6B 83% $514M 25% $911M $621M Adj. Net Revenue $3.7B Adj. Net Revenue Note: $621m Adjusted Net Revenue is net of ~($8m) corpora
Slide 30: Growth at scale and meaningful profitability
Growth at scale and meaningful profitability 43% revenue CAGR and 30%+ Adjusted EBITDA margins Adjusted Net (1) Revenue Contribution Profit (1) EBITDA (1) Adjusted Net Revenue and Adjusted EBITDA are non-GAAP measures. Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by Adjusted Net R
Slide 31: Illustrative impact of a bank charter
Illustrative impact of a bank charter Adjusted EBITDA ($M) (2021E - 2025E) $1,476 Base Case Adjusted EBITDA Forecast Potential Adjusted EBITDA impact $299 from bank charter Key Benefits of Bank Charter $1,052 $264 • Durability $718 • Lower cost of capital $234 $1,177 $447 • Increased NIM from holdin
Slide 32: Appendix: Transaction Overview
Appendix Transaction Overview Subhead section Advisory services offered through SoFi Wealth, LLC. SoFi Lending Corp., CFL #6054612. NMLS #1121636. ©2018 Social Finance, Inc. Confidential Information. Do not copy or distribute.
Slide 33: Transaction Overview (1/2)
Transaction Overview (1/2) Pro forma valuation Sources & Uses ($ in millions) ($ in millions except per share values) IPOE Illustrative Share Price $10.00 Sources Pro forma shares outstanding (millions) 865.1 Cash from IPOE $805 Pro Forma Equity Value $8,651 Cash from T. Rowe Investment 370 Cash fro
Slide 34: Transaction Overview (2/2)
Transaction Overview (2/2) Pro forma equity value of ~$8.7bn Pro forma ownership1 (%) $1,225 million PIPE raised at $10.00 per share, 14.2% 2.3% PIPE / Co- IPOE including $275 million from Social Capital and Investment sponsor Hedosophia 9.3% IPOE public shareholders Completion of transaction is exp
Slide 35: Non-GAAP Reconciliations – Q3'20 YTD & Historical
Non-GAAP Reconciliations – Q3’20 YTD & Historical Note: “Servicing Rights” reflects non-cash changes in fair value inputs and assumptions on servicing rights, including conditional prepayment and default rates and discount rates. “Residual interests classified as debt” reflects changes in fair value
Slide 36: Selected Projected Financial Results
Selected Projected Financial Results (1) (2) (3) (2) (4) (1) Management uses forward-looking GAAP and non-GAAP measures to evaluate SoFi's projected financials and operating performance. Certain forward-looking non-GAAP measures are presented without corresponding GAAP reconciliations due to the inh