SoFi (SOFI) – Shareholder Letter & a Channel Partner – April 13, 2024
Shareholder Letter
CEO Anthony Noto published a shareholder letter this past week. Most of it dug into the business model. Still, there were a few interesting notes. First, Noto reiterated his intention of turning SoFi into a top ten financial institution. He also reiterated that continued tangible book value and GAAP net income growth will come this year. Finally, for the tech segment, he called existing client adoption of its risk data pipeline and market “rapid.”
“The benefits of our strategy have only started to come to fruition thanks to a uniquely diversified business that is unmatched by any traditional or digital-only provider in our scale, capabilities and competitive advantage.” – CEO Anthony Noto
National Association of Realtors (NAR)
SoFi and the NAR announced a new mortgage partnership. Together, NAR members and clients will get preferred and discounted mortgage rates, as well as student loan refi and personal loan offers from SoFi. Mortgages are SoFi’s newest lending business. It’s only a few quarters removed from fixing back-end issues and getting the product ready for prime time. And since? Mortgage rates have skyrocketed to greatly hurt market demand. Those rates are likely near a cycle peak right now. As mortgage rates fall and mortgage demand accelerates, this is how SoFi can more easily gain traction. It’s much easier to use channel partners to grow brand and product awareness out of the gate vs. trying to do it all on your own.
SoFi will still conduct external marketing for this product, but the NAR channel is inherently more relevant, aggregated and targeted as a marketing channel partner to pursue. Like CrowdStrike uses AWS to accelerate growth… like Tesla uses Uber to sell more cars… like Progyny uses Blue Cross Blue Shield to add more clients… SoFi is using NAR to shorten the path to mortgages becoming a more material part of this business. As an important aside, that will make SoFi’s credit book more resilient across cycles as the potential shift from unsecured to secured debt unfolds. I’m a big fan of this news.
