Dive Brief:

• SoFi will acquire the digital banking technology firm Technisys in an all-stock deal worth approximately $1.1 billion, the personal finance startup said Tuesday in a press release.
• The deal would give SoFi control of the back-end technology on its banking platform. The company closed its $22.3 million acquisition of Golden Pacific Bancorp this month to officially become a bank. SoFi received conditional approval from the Office of the Comptroller of the Currency (OCC) roughly two weeks earlier.
• The Technisys deal is expected to close in this year's second quarter. SoFi estimates the transaction will generate $500 million to $800 million in additional revenue for the company by the end of 2025. The newly minted bank also expects to save $75 million to $85 million between 2023 and 2025 through the deal.

Dive Insight:

The deal would give Technisys shareholders roughly 84 million shares of SoFi common stock — less than 10% of the acquiring company’s market value as of Sept. 30.

The acquisition marks a steppingstone in what SoFi calls its "overall pursuit to build the [Amazon Web Services] of fintech,” featuring an "end-to-end vertically integrated banking technology stack."

“Technisys has built an attractive, fast-growth business with a unique and critical strategic technology that all leading financial services companies will need in order to keep pace with digital innovation," SoFi CEO Anthony Noto said in Tuesday's press release. "The acquisition of Technisys is an essential building block in delivering on our member-centric, digital one-stop-shop experience for SoFi members and our partners through Galileo."

SoFi acquired Galileo — an application programming interface (API)-based payments platform that once powered rivals Chime, Varo and Revolut — in April 2020. The deal afforded SoFi with the infrastructure necessary to offer banking services such as account opening, funding, transfers and bill pay. 

Galileo touted 89 million enabled customer accounts as of Sept. 30. The Technisys acquisition is meant to build on Galileo’s fintech cloud services. Once the deal is finalized, the combined platform will support products offering checking, savings, deposits, lending and credit cards, SoFi said. 

SoFi has sought to expand its banking offerings in recent times and increase profitability by pursuing a national charter. SoFi applied for a de novo charter in July 2020, but opted last year to accelerate the process by buying Golden Pacific Bancorp. In doing so, SoFi was able to switch from a de novo application to a change-in-bank-control application, which offers a faster turnaround time. 

SoFi went public in June through a merger with Social Capital Hedosophia Corp V, a special-purpose acquisition company (SPAC) backed by venture capitalist and former Facebook executive Chamath Palihapitiya.