BankTech

AI-enabled banking platform OppFi is latest fintech to score a SPAC deal

SPAC led by former TD Ameritrade Chairman Joe Moglia has entered into a definitive agreement with OppFi in a deal valued at $800 million

Opportunity Financial (OppFi) has entered into a definitive agreement to combine with a SPAC that would take the company public, valuing the equity of the combined company at about $800 million.

OppFi will combine with Joe Moglia’s SPAC called FG New America Acquisition, where Moglia serves as Chairman. Moglia previously served as TD Ameritrade’s Chairman of the Board, and was formerly CEO of the TD Ameritrade back when it was Ameritrade Holding Corporation.

OppFi is a fintech AI-enabled platform that powers banks to offer accessible products to consumers and has facilitated more than $2.3 billion in loan issuances covering over 1.5 million loans to date, according to a press release. The company aims to facilitate financial and credit access to those who don’t have access to traditional credit.

The transaction is expected to be funded through cash in trust, and the board of directors at each company have unanimously approved the deal.

OppFi generated revenue of about $323 million in 2020, reaching over 66% compound annual growth rate since 2017. The company had an estimated adjusted net income of $53 million in 2020.

The combined entities are set to trade on the NYSE under the ticker symbol “OPFI” when the transaction closes, which is expected to be by the end of Q2 this year. OppFi CEO Jared Kaplan said in a statement that the company is at the brink of a high growth digital financial services revolution.

“We see a solid opportunity ahead for OppFi to be the financial champion for the nearly 60 million everyday consumers in the U.S. as we continue to innovate our array of products, technology and capabilities in the years ahead. We are excited to be joining with the FGNA team to help make this a reality,” Kaplan said in a statement.

OppFi’s core customer earns about $50,000 annually, is employed, and has a bank account but can’t get access to traditional financial products.

SPAC’s are all the rage in the fintech space, in early January it was reported that online lender SoFi plans to go public through a merger with a special purpose acquisition company (SPAC) backed by billionaire VC investor Chamath Palihapitiya. The deal, announced Thursday, would value San Francisco-based SoFi at $8.65 billion.

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