Shares of SoFi Technologies witnessed an upsurge on Monday following the announcement of a $2 billion partnership with Fortress Capital. This deal aims to expand the company's personal loans business. SoFi’s CEO, Anthony Noto, expressed in a joint statement that this new venture would allow the company to diversify with less capital-intensive and more fee-based revenue sources.
Fortress Capital perceives SoFi's personal loans platform as a "compelling investment opportunity" for its funds. SoFi's stock price observed a significant increase of over 8%, steering shares back toward a breakeven point for the year compared to lows experienced in August.
Second-quarter lending services revenue reportedly rose by 3% year-over-year to approximately $340 million, contributing more than half of SoFi's total revenue for the quarter. Third-quarter results are due later this month. Speaking at a Goldman Sachs conference in September, Noto highlighted the firm's success with their lending product, noting its profitability and steady growth, particularly in low rate environments.