SALT LAKE CITY — Online personal finance giant SoFi announced on Tuesday it plans to acquire Utah-based financial technology firm Galileo for $1.2 billion in a cash-and-stock deal.
Founded in 2000, Galileo was a very early player in the world of digital payment processes and has pioneered advances in application program interfaces, or APIs — the digital connections that allow one software program to connect and communicate with another software program.
One common analogy for such program interfaces is to think of them as restaurant waiters that act as liaisons between the diners and the kitchen, shuttling orders and meals between the two parties.
In a Deseret News interview last year, Galileo founder and CEO Clay Wilkes said the plan from the beginning was to rethink, and rebuild, the world of digital financial transactions.
“Galileo is a technology stack that many companies use to really do anything in the changing landscape of banking and payments,” Wilkes said.
While digital payments and money transactions were still very much a nascent concept when Galileo launched, the current state of the industry is one of vibrance and astounding growth. Wilkes said there are currently over 12,000 financial technology, or fintech, companies in the world and “Galileo serves many of them as clients.”
HIs company helps those clients open and verify new financial accounts, issue and process payment cards and launch new products. He noted Galileo is the platform on which the No. 1 fintech companies in the U.S., United Kingdom, Canada and Mexico all conduct business.
Galileo reports it processed over $53 billion of annualized payments volume in March 2020 — up from $26 billion in September 2019, with accelerating growth.
Wilkes will remain as CEO of Galileo as the company continues to operate as an independent subsidiary of San Francisco-based Social Finance Inc., widely known as SoFi.
SoFi CEO Anthony Noto said the addition of Galileo will add a powerful suite of enterprise business solutions to the work the company is already doing in the personal finance sector.
“SoFi has established itself as a leader in the fintech sector, providing our more than 1 million members a full array of financial products to help them get their money right,” Noto said in a statement. “The response by our members to our innovation across borrowing, saving, spending and investing has motivated us to think bigger, bolder and more expansively given the insatiable consumer appetite for financial services innovation.
“While we march forward on our mission to help people achieve financial independence through our own direct efforts, with Galileo, we can enable a broader ecosystem of companies to join us in helping the world achieve financial independence.”
Wilkes said he expects the combined forces of Galileo and SoFi will lead to a “powerful” new fintech leader with connections across multiple client demographics.
“SoFi has built a very strong diversified financial services company focusing on a full suite of financial services,” Wilkes said in a statement. “These are products that many of our leading fintech clients are asking for. Distributing products through our enterprise class API is the vision behind this combination. I think it’s very powerful.
“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.”
Cottonwood Heights-based Mercato Partners led Galileo’s Series A financing in 2014 with an $8 million investment. Greg Warnock, Mercato’s managing director and Galileo board member, said Wilkes has done a “world class job” in building the company into a fintech powerhouse over the last nearly 20 years.
“To excel in the growth stage, a CEO and leadership team must be able to envision and execute at a level of innovation and ambition others might not even imagine,” Warnock said in a statement. “They must be hungry for large scale problem-solving and provide the energy and direction to fuel exponential growth. The CEO, in particular, must convey a strong vision and display an ongoing, unrelenting commitment to excellence.
“Clay Wilkes absolutely fits that profile and has done a world-class job of leading Galileo. We congratulate Clay and the entire Galileo team and look forward to the continued pace of innovation and value Galileo will bring to SoFi customers.”
Galileo employs about 250 staff members and is headquartered in Salt Lake City with offices in San Francisco and New York City. The pending acquisition transaction is subject to regulatory approvals and other customary closing conditions.