Here is the pitch that lead investor in IPOE made to investors and is publicly included in the SEC filing. Note that is contains forecasts which are allowed in SPAC transactions but prohibited in IPO process.
SOFI Pitch From lead SPAC Investor January 2020
(Filed publicly with SEC and presented on CNBC)
Investment Thesis for SoFi - $IPOE
Summary
??Incumbent banks have been hamstrung coming out of The Great Financial Crisis
??Legacy technology that is, in some cases, 50-70+ years old has limited the capability of incumbent banks to thrive in an increasingly digitally native world
??Meaningful changes to regulatory capital ratios, reduced activity in profitable business areas such as trading, and increased operational oversight have all restricted their growth
??Focus on short term return on equity has driven restrictive lending practices and poor customer experience
??Shareholder returns and total market cap of the largest banks have been flat and, largely, decoupled from rates since Dec-2013
??Innovation is emerging rapidly to disrupt these legacy banking practices
??Since 2010, 296 “Neobanks” have been funded to disrupt core checking and savings account capability globally
??Since 2010, more than $500B has been invested worldwide to disrupt the entire financial services ecosystem
??Consumer expectations in FinTech are converging to what consumers already demand in other areas of the economy; driving a consumer migration from legacy products to new startups that offer:
??Low/no fees
??Fair and transparent lending
??Multiple products and a “one stop shop” for a variety of a consumer’s financial needs
Qualitative
??SoFi has built a suite of best-in-class digital solutions to help consumers “get their money right”
??More than 56k ratings in the app store, average of 4.8 stars
??More than 1.8M unique members in 2020, expected to grow to 3M unique members by 2021
??SoFi offers a full suite of lending products and financial services to consumers which has driven increasing adoption and sequential QoQ growth over the past six quarters:
??Lending: Student Loan Refi, In-school Lending, Personal Loans, Home Loans, Credit Card
??Financial Services: SoFi Money, SoFi Invest, SoFi Credit Card
??SoFi also offers the leading Enterprise banking infrastructure platform for other FinTech companies
??This “AWS of FinTech” (aka Galileo) provides the core banking infrastructure that not only powers SoFi but also other leading FinTech companies including:
¦?Robinhood, Chime, Dave.com and MoneyLion among others
??Galileo infrastructure was responsible for enabling a large majority of all new Neobank account creation in the US in 2020
Quanitative
??Best-in-class CAC and Churn allow for best-in-class contribution margins and rapid growth
??65% of Home Loan sales came from upsells to existing members
??24% of all new product sales came from upsells to existing members
??Adjusted Net Revenues are scaling rapidly with 5yr CAGR forecasted to be 43%
??2020: $621M
??2021E: $980M
??2025E: $3.67B
??Forecast profitability in 2021 with growing Adj. EBITDA margins approaching 32% by 2025:
??2020: ($66M)
??2021E: $27M
??2025E: $1.17B
??Margin of Safety for new investors:
??EV: $6.58B
??Equity Value: $8.65B
??6.7x 2021E EV/Revenue
??1.8x 2025E EV/Revenue
¦?1.6x 2025E EV/Revenue with bank charter
??13.6x 2025E P/E
¦?~9x 2025E P/E with bank charter
