FILE PHOTO: A Nasdaq market maker works during an IPO at the Nasdaq Market site in New York. REUTERS/Brendan McDermid/File Photo
(Reuters) -California fintech giant SoFi is teaming up with British capital markets platform PrimaryBid Technologies to expand its initial public offering share placement business, the company told Reuters.
SoFi's new directed share platform, which went live on Wednesday, is designed to allow companies raising capital to allocate a portion of their offering to employees, customers and other individual investors more efficiently than similar services provided by investment banks that underwrite IPOs, SoFi CEO Anthony Noto said in an interview.
SoFi's move is another example of how fintech companies are increasingly encroaching on the territory of traditional financial firms, leveraging technology to go toe-to-toe with Wall Street.
SoFi and rival fintechs like Robinhood have been pushing into early retail IPO access, which has long been the exclusive domain of Wall Street funds.
Last year, SoFi offered retail customers a chance to buy into the IPOs of Instacart and Arm Holdings before shares began trading. Such early access allows investors to snap up a company's shares at a discount assuming the share price rises after the stock goes public, though there are no guarantees.
SoFi's partnership with PrimaryBid will expand its IPO offerings by creating a digital way for companies to place shares with key stakeholders and raise more capital at the IPO stage. That process has historically been clunky and manual, Noto said.
"It's the natural evolution of our desire to give investors more and more access to the vehicles that allow the ultra-wealthy to get unique investment opportunities," he added.
PrimaryBid, which provides technology that connects individual investors with issuing companies and counts SoftBank, Fidelity and London Stock Exchange Group among its backers, will provide the underlying technology for the SoFi platform.
"Companies want intelligent, targeted investor inclusion at IPO to enfranchise those people who matter to their long-term success," said Anand Sambasivan, CEO of PrimaryBid, in a statement.
The move comes as the IPO market has bounced back in 2024 on receding recession fears and a searing stock market rally driven by U.S. Federal Reserve rate cuts.
Thomson Reuters, which owns Reuters News, holds a minority stake in LSEG.
(Reporting by Hannah Lang in New York; Editing by Michelle Price, Jamie Freed and Jonathan Oatis)
