Pagaya Technologies Ltd. (“Pagaya”), a B2B2C financial technology company, recently announced an upsized $350 million fully committed common equity PIPE. The PIPE will further support Pagaya’s business plan upon the close of its pending business combination with EJF Acquisition Corp, previously announced in September 2021.
“Pagaya is led by a best-in-class management team and is at the forefront of FinTech innovation. The support of this distinguished investor group is a vote of confidence in the company’s strategy to penetrate what is a substantial addressable market, including banking, consumer lending, credit cards, and point-of-sale financing,” said Manny Friedman, Chairman, EJF Acquisition Corp.
The additional $220 million of new committed capital represents a cornerstone investment by a premier group of long-term investors, including Tiger Global, Whale Rock, GIC Singapore’s Sovereign Wealth Fund, Healthcare of Ontario Pension Plan (HOOPP), and G Squared. To accommodate the significant demand, funds affiliated with EJF Capital LLC reduced a portion of their allocation.
“At Pagaya we value relationships and expertise. We are incredibly humbled to have the support of world-class, long-term investors who share our vision,” said Gal Krubiner, Co-Founder and CEO of Pagaya. “As we enter 2022 focused on the continued adoption of our technology by additional large banks and auto lenders, this incremental funding reflects an enormous vote of confidence in our strategy and our team.”
“Pagaya has created a new category as the AI backbone of the financial ecosystem,” said Scott Shleifer, Partner, Tiger Global. “As a result, it is one of the most attractive growth opportunities that we’ve encountered in technology investing.”
Kristov Paulus, Partner at Whale Rock Capital Management commented, “Pagaya’s differentiated technology and data network strengthen over time, deepening its competitive moat. We are excited to support the team as they expand consumers’ access to credit and modernize the financial services industry broadly.”
“What we see in Pagaya is a combination of cutting-edge technology applied in new and innovative ways and an exciting business model. We see a long-term win-win partnership in the platform which allows us to invest in a smart and scalable manner, and where we can also add value through the partnerships we bring,” said Liew Tzu Mi, GIC’s Chief Investment Officer for Fixed Income.
As announced previously, Leslie Gillin, former Chief Marketing Officer of JP Morgan Chase and President of Chase Co-Brand Card, joined Pagaya as Chief Growth Officer, adding additional senior-level capabilities to a team focused on long-term growth with the largest financial services partners. “I know first hand the differentiated value we are bringing to our partners and their customers,” said Leslie Gillin, Pagaya’s Chief Growth Officer, “as a result, I believe the best is yet to come for Pagaya.”
On November 29, 2021, Pagaya announced strong third-quarter 2021 performance with $137 million in Q3 2021 revenue and $320 million in revenue year-to-date through Q3 2021, over 220% higher than full-year 2020 revenue.
On October 18, 2021, Pagaya announced its new partnership with SoFi, the digital personal finance company, to enable SoFi to broaden members’ access to its financial products. This partnership with SoFi is the largest deployment of Pagaya’s technology in the fintech marketplace to date.
The proposed business combination values Pagaya at a pro forma implied enterprise value of approximately $8.5 billion at closing. In addition, the transaction includes approximately $287.5 million in gross proceeds from EJFA’s cash in trust (assuming no redemptions) and $350 million in gross proceeds from the upsized and fully committed PIPE. The business combination, which has been unanimously approved by the boards of directors of both Pagaya and EJFA, is targeted to close in early 2022, subject to shareholder approvals and other customary closing conditions.
