SoFi was in talks to acquire a fintech backing some of the hottest robo advisors as it eyes expansion beyond its lending roots
- Lending startup SoFi was in recent talks to acquire clearing and custody firm Apex, but the deal fell apart, Business Insider has learned
- Apex, which works with robo-advisors such as Betterment and Stash, wanted more than $600 million for an acquisition.
- Instead of acquiring Apex, SoFi made a minority investment in the company.
Lending startup SoFi was in late-stage talks to acquire a fintech backing some of the industry's top robo advisors in an attempt to grow its digital wealth platform, Business Insider has learned.
The $4 billion San Francisco-based fintech firm held discussions in recent months to buy Apex Clearing, a custody and clearing firm that services fintechs like Betterment and Stash, but deal talks fell through, according to people familiar with the matter. Acquiring Apex would have helped SoFi continue to grow beyond its lending roots to become a personal finance hub for managing people's money across the board.
SoFi's wealth management platform would be able to recognize cost savings through buying Apex, according to one source, as it could handle its clearing and custody needs in-house.
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Apex, which already offers clearing and custody services for SoFi, wanted more than $600 million for an acquisition, according to a source. But the two sides couldn't agree on price and SoFi is now taking a minority stake in the fintech, which is owned by Chicago investment firm Peak6. The investment involves buying out another minority owner, two of the people said.
A representative for SoFi declined to comment, while a representative for Apex could not be reached for comment.
Apex holds an important position amongst digital wealth management platforms. Fintech startups have limited choices when it comes to custody and clearing. BNY Mellon's Pershing is one option although it typically works with larger asset managers.
Still, some startups have chosen to bring clearing in-house. In October 2018, Robinhood, which had been a client of Apex, announced it would self-clear and self-custody.
SoFi is primarily known for its student loan refinancing business, but the company has worked in recent years to broaden out its focus by adding on additional banking services, such as home equity, brokerage, checking and savings accounts, and crypto.