Financial services company SoFi purchased payment processing fintech Galileo for $1.2 billion, in a cash-and-stock deal announced on Tuesday. SoFi CEO Anthony Noto is betting on the coronavirus pandemic and business shutdown accelerating a long-term trend toward digitization in financial services, he told CNBC. Meanwhile Galileo will see its business relationship with SoFi evolve from partnership into ownership. The two firms started working together in early 2019, according to the report.
Galileo’s cash solution, branded as Galileo Money +, is already used as a high-interest cash solution by Carson Group and some 200 advisors associated with Independent Financial Partners. It also garnered attention as the backbone in Interactive Brokers' award-winning integrated payment card, allowing investors to stay invested in noncash vehicles up until the point of sale. While offering certain advisors the opportunity to differentiate their cash solutions from other options available in the market, Galileo was also providing its services to consumers via other partnerships. The technology powering Carson and IFP’s offerings is the same powering SoFi’s cash product, launched last year as SoFi Money.
Following the announcement of the deal, Carson Group expects to continue its partnership with Galileo. “They have a truly revolutionary product and are now joining with the tremendous team at SoFi and their growing ecosystem of solutions,” said Jud Mackrill, CMO at Carson Group. “We know that this was no rush decision and I have full confidence in their desire to maintain a focus on their clients while delivering added value to all of the customers served by SoFi.”
“The ease of experience and value provided were key in guiding us to a partnership in 2019,” he added. “We expect to continue our relationship with Galileo.”
Under SoFi, Galileo will retain CEO and founder Clay Wilkes, with Wilkes continuing as CEO. The firm will operate as an independent subsidiary of SoFi, according to Galileo’s announcement of the deal.
“Both companies share a vision of reinventing and optimizing how digital finance is done today, making this a natural fit,” according to a blog post from Galileo. “We look forward to working with SoFi to bring their members the very best in financial services technology, and with all our clients to help them reach their goals.”
“Clay is an extraordinary founder and leader,” said Noto, in a statement. “I could not be more excited by the opportunity to work side-by-side with a visionary who has not only built a great company, but one that has endured unprecedented technological and financial changes, through multiple economic cycles.” Galileo was founded in 2000, while SoFi was founded in 2011.