SoFi to buy payments firm Galileo for $1.2 billion
SoFi has agreed to pay $1.2 billion to purchase the Salt Lake City-based payments firm Galileo Financial Technologies.
The deal, announced Tuesday, would give SoFi control of a technology platform that is currently used by some of its competitors in digital banking.
San Francisco-based SoFi said that it will pay for the acquisition with a combination of cash and stock. SoFi plans to operate Galileo as an independent subsidiary, with Galileo founder Clay Wilkes serving as the unit’s CEO.
Galileo uses application programming interfaces to enable a variety of digital banking capabilities. Its customers have included Chime, Robinhood, Transferwise, and Varo Money. SoFi currently uses the firm’s technology for its own digital transaction account, which is known as SoFi Money.
Last fall, an operational problem at Galileo caused more than 24 hours of outages at Chime and Varo Money. Customers complained that their debit card transactions were declined, and they were unable to withdraw cash from ATMs.
But in the wake of that incident, Galileo’s growth has continued. Last month, the firm’s payment volume crossed $45 billion on an annualized basis, according to SoFi.
SoFi CEO Anthony Noto said in a press release that Galileo, which is backed by the venture capital firm Accel, is in an industry-leading position in the shift to digital financial services.
SoFi plans to use Galileo both to accelerate its own technology roadmap and to continue working with other fintechs.
“With the help of SoFi, we intend to continue to grow with and support all of our existing clients and the product roadmaps that they have defined,” Wilkes said in the press release.