Can SoFi’s demographic-oriented approach really work? How?

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Startup SoFi has raised — wait for it — $1.38 billion of venture funding to date. That’s a lot o’ funding.

I’ve wondered, what it is about SoFi that merits such an investment? Yes, it is a lending intensive business — the startup launched in 2011 by offering student loan refis. But what’s the technology in that?

Last week, Nino Fanlo, the company’s president and CFO, presented in New York the company’s vision for the future. Essentially, SoFi is not out to create new technology or discover a new business model based on IT innovation. Rather, its “thing” is offering (relatively) standardfare financial services to a particular demographic: urban professionals. Think of it as the ag bank of McKinsey.

On the surface, I wonder whether this can work. Is all you need to get $1.38 billion of funding a demographic? Anyone willing to fork over that amount if I start making personal loans to florists?

Or, maybe SoFi’s demographic approach is spot on? Banks certainly have rarely exhibited an ability to target a demographic beyond the blunt-knife of age. Those that have been able to target demographics even slightly — Navy FCU and USAA come to mind — have found sustainable growth.

So what’s the verdict? Can SoFi win just by targeting urban professionals?

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