Fintech startup SoFi to acquire Utah-based payment processor Galileo for $1.2 billion
SoFi, a San Francisco, California-based personal finance startup, has agreed to buy Utah-based payment processor Galileo for $1.2 billion. According to the CEOs of both companies, the cash-and-stock deal will help the companies launch new products, expand internationally and capitalize on consumers’ shift to digital finance. Galileo, which has been around for more than a decade, is a more established company than its acquirer and works with many of SoFi’s competitors.
“It’s the right time to do something like this — we’re on the precipice of a transition to digital from physical finance,” Noto told CNBC in a phone interview. “It’s going to serve people in this environment and the need for mobile financial services is only going to accelerate.”
Founded in 2000 by Clay Wilkes and Dave Wilkes, the Salt Lake City, Utah-based software company connects banks to credit card processors through APIs, or application programming interface software. Galileo is behind the tech that powers most fintech companies, financial institutions and investment firms in North America, Latin America, Canada, Asia, and Europe, delivering solutions in the complex world of payments and financial services. It is a flexible platform, handling thousands of financial transactions every moment of every day. Galileo is the category-leading APIs and comprehensive back-office support empowers its clients to stay fully focused on creating the greatest value and best user experiences for their customers.
Galileo clients using Fraud Protection experience fraud losses of approximately one basis point, on average. That’s 80 percent lower than the industry average, which translates into a bottom-line difference of more than $400 per $1 million transaction value. Galileo Fraud Protection with AI is an accurate artificial intelligence for fraud, unleashing the power of machine learning on the massive amounts of transaction data that the company handles to detect previously undetectable fraud patterns and drive fraud losses even lower.
The two companies first started working together early last year when the San Francisco, California-based SoFi began using Galileo as its payments processor for SoFi Money. The conversations about the deal began before “things got challenging” due to coronavirus. In the end they were able to continue despite the current economic slowdown, according to Noto and Galileo CEO Clay Wilkes.
SoFi was founded in 2011 by Daniel Macklin, Ian Brady, James Finnigan, and Michael Cagney.