SoFi to offer customers cryptocurrency trading via deal with Coinbase
Online personal finance provider Social Finance Inc. today added support for cryptocurrency trading through a new partnership with Coinbase Inc.
The deal will allow customers of the startup to check prices and buy certain cryptocurrencies, although exactly which cryptocurrencies was not specified.
“Our target audience wants to see what the price of cryptocurrency is and to buy it,” SoFi Chief Executive Officer Anthony Noto told CNBC. “They have a desire to do that and in many cases they already are.”
The deal is similar to one Coinbase has with Fidelity Investments Inc., though Fidelity doesn’t offer trading support. Fidelity is in the process of rolling out its own cryptocurrency services.
SoFi was founded in 2011 and pitches itself as a fintech company that provides financial services to millennials. The company hasn’t been without problems, such as its previous CEO being forced to step down in 2017 following sexual harassment allegations, but it has since showed momentum. As of September, the company was believed to have about 500,000 users with around half its customer base using the service to manage student loans.
SoFi has been well-backed by venture capital as well, raising $2 billion so far with an estimated valuation of $4.7 billion as of 2017, likely higher today. Noto also told CNBC that an initial public offering was “not a priority” in 2019 but an IPO remains on the company’s longer-term roadmap.
Although 500,000 users isn’t exactly a huge number in an age where user numbers are often measured in tens and sometimes hundreds of millions, a half-million new users with exposure to Coinbase services is still a boost for the digital currency exchange. As of October, Coinbase had 25 million users and was growing at 5 million users every six months.
More than simply adding 500,000 extra users, the SoFi deal also demonstrates that Coinbase can offer white-label cryptocurrency trading support to third parties, a potential area for growth in the years ahead.
Image: SoFi
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