SoFi will allow its customers to invest in initial public offerings (IPOs) of companies, an investment opportunity that has traditionally been reserved for large institutional investors, the online lender said on Friday.
The move by SoFi comes a day after Reuters reported online brokerage Robinhood was building a platform to “democratize” IPOs, including its own, that would allow users of its trading app to snap up shares alongside Wall Street funds, according to people familiar with the matter.
Robinhood plans to carve out a chunk of its shares on offer in its IPO for its 13 million users, and to use technology it is building to administer this part of the offering, the sources said.
It would need to negotiate agreements with companies and their brokerages and get the blessing of U.S. regulators, the sources said. Robinhood could have leverage in these negotiations by arguing it would be acting as a bridge between the IPO and a major pool of investor demand, the sources added.