Social media and financing company Renren closed a $150m preferred stock investment yesterday in US-based online lending platform Social Finance (SoFi), one of its portfolio companies since 2012.
The funding comes less than a month after SoFi closed a $1bn series E round featuring Renren, telecommunications firm SoftBank, Wellington Management Company, Institutional Venture Partners, Baseline Ventures, DCM Ventures and Third Point Ventures that valued it at $4bn.
Founded in 2011, SoFi operates a lending platform for student loans, mortgages and personal loans, using a complex mix of factors to judge an applicant’s viability. It has issued more than $4bn in loans altogether.
SoFi has now raised about $1.57bn in total funding. Renren initially invested $49m as part of a $77m series B round also backed by DCM and Baseline Ventures, before returning for a $80m series C where Baseline and DCM were joined by Wicklow Capital and Peter Thiel.
Third Point, Wellington Management and Institutional Venture Partners contributed an additional $200m alongside undisclosed additional investors in February this year. SoFi was said in March to be considering a $500m initial public offering, but those plans appear to have been put on the backburner.
China-based Renren, best known for its widely used social network, made the investment at a time when it is looking to move the core of its business into online finance. To this end, it has also ploughed sizeable amounts into LendingHome, Motif and CreditShop.
Renren intends to secure up to $130m in debt from several, as yet undisclosed financial institutions to support the SoFi investment.