SoFi Focused on Diversification

SoFi signaled that diversification is a main goal in its business right now.

“Less capital, less risky businesses get valued much higher,” said SoFi CEO Anthony Noto in the company’s recent quarterly earnings call. “And we don’t want to have an over-dependence on a high capital, high-risk business. This year, the macroeconomic environment accelerated our diversification and it’s worked out quite well.”

Within the lending category of its business SoFi wants to scale up home equity loans and student loan refinancing and become more conservative on personal loan growth. That strategy is not only being driven by its diversification initiative but also the economy. For example, Noto said that the company wanted to see how the years trends with unemployment.

“We’re at 4.1% [unemployment], a move to 4.2% could signal a recession,” Noto said in the days before the actual unemployment numbers revealed an increase to 4.3%. SoFi’s stock dropped by more than 6% on the news.

SoFi’s business loan marketplace was hardly mentioned, generating only a single line in the company’s earning’s announcement. “Small and medium businesses can now apply and get approved offers from lending partners all on SoFi,” it said.

SoFi says its business loan partners can lend up to $2 million and can fund as fast as the same day.