SoFi acquires engineering, product teams from mortgage start-up

by Francis Monfort30 Jan 2018
P2P lender Social Finance (SoFi) has added 20 employees following its purchase of the engineering and product teams of mortgage start-up Clara Lending, Bloomberg reported.

People familiar with the matter told the publication that the acquisition is part of the company’s efforts to expand its offerings beyond student-loan refinancing. The company has confirmed the purchase and said the deal allows it to “immediately ramp up our technical capabilities.”

The terms of the deal were not disclosed.

With the acquisition, SoFi has filled about 20 of 100 positions its plans to hire engineers for, Bloomberg reported, citing one of the people familiar with the matter.

Clara was founded by a former US Treasury policy advisor and offered an online platform for loan applications. PitchBook data cited by the report showed that the start-up had fewer than 100 employees. It has raised $24.3 million in funding, with Redpoint Ventures and Venrock as lead investors.

SoFi’s mortgage business represents a small part of its business compared with loan refinancing. However, the company holds many of those mortgages on its books instead of securitizing them, making the business riskier, Bloomberg said.

The acquisition comes shortly after SoFi announced that Anthony Noto would be joining the company as CEO from Twitter, where he served as COO. Noto replaces Mike Cagney, who resigned in September after controversy arose over the social lender’s allegedly toxic culture. Executive Chairman Tom Hutton had served as interim CEO.

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