SoFi Partners with PrimaryBid to Enhance IPO Share Placement

By Hannah Lang

(Reuters) – California fintech giant SoFi (NASDAQ:SOFI) has partnered with British capital markets platform PrimaryBid Technologies to bolster its initial public offering (IPO) share placement business, as reported by Reuters.

SoFi’s new directed share platform, launched on Wednesday, aims to enable companies raising capital to allocate a portion of their offering to employees, customers, and other individual investors more efficiently than traditional services provided by investment banks that underwrite IPOs. SoFi CEO Anthony Noto highlighted this in an interview.

This initiative exemplifies how fintech firms are increasingly competing with traditional financial institutions, leveraging technology to rival Wall Street.

SoFi and competing fintechs like Robinhood (NASDAQ:HOOD) are making strides into the early retail IPO access market, traditionally dominated by Wall Street funds. Last year, SoFi provided retail customers with opportunities to invest in the IPOs of Instacart (NASDAQ:CART) and Arm Holdings (NASDAQ:ARM) prior to their market debut. Such early access allows investors to purchase shares at a potentially lower price, assuming the market value increases post-IPO, though there are no guarantees of profit.

With its partnership with PrimaryBid, SoFi aims to improve its IPO offerings by creating a digital method for companies to distribute shares to key stakeholders and raise more capital during the IPO process, which has historically been cumbersome and manual, according to Noto.

Noto remarked, “It’s the natural evolution of our desire to give investors more and more access to the vehicles that allow the ultra-wealthy to obtain unique investment opportunities.”

PrimaryBid, which provides technology connecting individual investors with issuing companies, is backed by notable investors including SoftBank (TYO:9984), Fidelity, and London Stock Exchange Group (LON:LSEG). Anand Sambasivan, CEO of PrimaryBid, commented that “Companies want intelligent, targeted investor inclusion at IPO to enfranchise those people who matter to their long-term success.”

This development occurs as the IPO market rebounds in 2024, fueled by declining recession fears and a robust stock market rally driven by U.S. Federal Reserve rate cuts.

Thomson Reuters (NYSE:TRI), the parent company of Reuters News, holds a minority stake in LSEG.