It’s official: Buy Now Pay Later firms should start picking out Lamborghinis.
In the fifth example of major industry news in four weeks, it was announced another BNPL would be acquired.
Wednesday morning Goldman Sachs, not looking to be left behind, announced it would be acquiring GreenSky for $2.24 billion. Goldman PR described GreenSky as the “largest fintech platform for home improvement consumer loan originations,” but the firm also offers healthcare and consumer loans.
GreenSky stock jumped 52 per cent to $11.79, likely to hover below the $12.11 a share price point Goldman agreed to buy. Goldman stock did not move an inch.
After going public at a valuation of $4 billion in 2018, GreenSkys stock has tanked in the three years since. Still, the US-based firm boasts a network of 4 million consumers financing a total of $30 billion using the “apply and buy” online tech and holds a $9 billion loan portfolio.
Goldman has already been on top of the BNPL game. At the beginning of August, Apple and Goldman announced a US-based BNPL system called Apple Pay Later. Goldman would underwrite US-based Apple Pay users who wanted to… pay later. But soon after, Apple said they would work with Affirm for BNPL outside of the US, starting in Canada.
In a short span of days things heated up: Square is acquiring Australian Afterpay for $29 billion, Paypal bought Japan’s Paidy for $2.7 billion, and Amazon announced customers could pay later with Affirm. Though, like the yet-to-be acquired or public Klarna, most of these firms are e-commerce based BNPL. GreenSky is more of a Merchant focused, contractor financing option firm.
Sachs bought now, getting paid later
Goldman may be aiming for the US home improvement market, recently exploding— people have been stuck at home with nothing to do but build new cabinets for nearly two years.
Some estimates put the improvement market at more than $420 billion to optimistically rise upward of a trillion by 2030. Goldman can aim to finance that exact market through more than 10,000 merchant partners that use the GreenSKy platform.
“We have been clear in our aspiration for Marcus to become the consumer banking platform of the future, and the acquisition of GreenSky advances this goal,” Chairman and CEO David M. Solomon said.
It’s not a style of the time, one-off purchase from a neo banking/fintech/payments company. Instead, Goldman Sacks will add to its collection of financial startups and companies forming the growing Marcus brand.
Goldman has been building its consumer banking app before it was in vogue. In 2016, Goldman bought a web-based retirement savings firm called Honest Dollar. Two years later, it picked up a personal finance startup called Clarity Money.
Last month, Goldman bought Insurer NN Group’s money management arm for nearly $2 billion.
“The GreenSky team and I are thrilled to be joining Goldman Sachs,” David Zalik, Chief Executive Officer of GreenSky said.
“From GreenSky’s inception, our mission has been to deliver exceptional value helping businesses grow and delight their customers. In combination with Goldman Sachs, we’re excited to continue delivering innovative point-of-sale payment solutions for our merchant partners and their customers on an accelerated basis.”
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