The financial services company SoFi is preparing to become publicly traded through a merger agreement with Social Capital Hedosophia Holdings Corp V, a special purpose acquisition company. This entity is one of several blank-check companies established by venture capital investor Chamath Palihapitiya.

SoFi has confirmed the transaction, which establishes a valuation of $8.65 billion for the fintech firm, as stated in the company’s official announcement. The deal incorporates $2.4 billion in cash, comprised of $1.2 billion from a definitive private investment in public equity (PIPE) – spearheaded by Palihapitiya and including contributions from Altimeter, Baron Capital Group, BlackRock, Coatue, and others – $805 million from the SPAC’s existing cash reserves, and further funding from a previous investment in SoFi finalized last month, which was managed by T. Rowe Price.

Reports regarding a potential agreement to bring SoFi public through a SPAC have circulated for several weeks. Recent developments, identifying Palihapitiya as the likely SPAC partner, were initially reported by Reuters.

Currently headed by former Twitter COO Anthony Noto, SoFi was initially founded over ten years ago with a focus on providing more favorable terms for student loan refinancing. The company has since broadened its services to include a range of financial products for individuals, such as loans, investment options, and insurance, alongside cash management and wealth-building tools. It also expanded into the business-to-business sector through its acquisition of Galileo last April.

Since its inception, SoFi has secured substantial funding, most recently completing a $500 million funding round in 2019, led by Qatar Investment Authority, a private equity and sovereign wealth fund based in Doha, Qatar. The company’s previous valuation stood at $4.3 billion.

Palihapitiya is widely recognized for popularizing the use of SPACs. These companies, also known as blank check companies, are created to merge with or acquire existing businesses. The shell company obtains capital through an initial public offering with the intention of combining with a private company, effectively making the latter publicly traded. A significant number of SPAC transactions have taken place over the last year and a half.

In 2017, Palihapitiya raised $600 million for his inaugural SPAC, Social Capital Hedosophia Holdings, which was subsequently used to acquire a 49% ownership stake in the British spaceflight company Virgin Galactic. Social Capital Hedosophia Holdings Corp V represents Palihapitiya’s third SPAC venture; his second completed a merger with Opendoor in 2020.

Updated January 7, 2020: Incorporates official deal specifics released by SoFi.