This morning, SoFi announced they have agreed to acquire Galileo Financial Technologies for $1.2 billion in cash and stock. It is interesting timing given almost all of the news as of late has centered around the coronavirus crisis as many companies focus on staying afloat.
Galileo allows companies to offer financial services to both consumers and businesses such as checking and savings accounts, direct deposits, ACH transfers and bill payments. SoFi is already a customer of Galileo, which powers SoFi Money among other offerings.
According to the press release, Galileo processed over $53 billion of annualized payments volume in March 2020, up from $26 billion in September 2019. It seems like this is a customer acquisition play for SoFi as they look to provide their full suite of financial services products to more customers. Interestingly, the acquisition may also allow SoFi to access international markets through current Galileo partners.
Clay Wilkes, CEO of Galileo provided the below statement as part of the press release:
“SoFi has built a very strong diversified financial services company focusing on a full suite of financial services. These are products that many of our leading fintech clients are asking for. Distributing products through our enterprise class API is the vision behind this combination. I think it’s very powerful…We’re excited to work with SoFi to build on the services that have made Galileo the leading supplier of infrastructure services to leading financial, technology, and fintech companies. With the help of SoFi, we intend to continue to grow with and support all of our existing clients and the product roadmaps that they have defined.”
Galileo will operate as a standalone business collaborating with SoFi and Clay Wilkes will continue to serve as CEO. Wilkes has been founder and CEO of Galileo Financial Technologies since June 2000. The deal is still pending regulatory approval and conditions of closing.
It is great to see one of the leaders in fintech today demonstrate their strong financial situation by making a significant acquisition. This deal has likely been in the works for some time but given the current environment it is still notable that the acquisition is moving forward. It is also going to be interesting to see how this plays out given many of SoFi’s competitors are currently leveraging Galileo. American Banker notes that current customers of Galileo include Chime, Robinhood, Transferwise and Varo Money.