Goldman boosts consumer offering with $2.2bn GreenSky deal

Goldman Sachs will acquire GreenSky in an all-stock deal valued at $2.24bn

US investment bank Goldman Sachs has entered into a deal to acquire home improvement fintech platform GreenSky in an all-stock deal valued at $2.24bn.

The merger, aimed at bolstering Goldman's digital offerings, will accelerate the bank's efforts to “create the consumer banking platform of the future, help tens of millions of customers take control of their financial lives, and drive higher, more durable returns,” the company said in a statement.

Atlanta-based GreenSky facilitates home improvement loans and financing solutions that can be repaid within weeks or months. It has a network of more than 10,000 merchants and has powered over $30bn in loans to four million customers.

The firm had been on Goldman's acquisition radar for quite some time, with the two companies entering preliminary talks a few years ago, according to a report published by the Wall Street Journal.

Moving into consumer finance

The move signals a push towards expanding Goldman's consumer finance offering, as well as entering the ‘buy now, pay later’ arena. It is a sector that has been popular lately, as evidenced by Square’s latest purchase of Afterpay in a $29m deal, and PayPal’s acquisition of Japanese-lender Paidy.

Goldman's fintech arm, Marcus – a digital lender that provides banking solutions and financial wellness –  will be the primary focus of the merger as the two companies integrate their platforms and build on their consumer finance solutions. Marcus launched five years ago to compete with the then-surge of fintech startups and challenger banks and serves more than eight million users. 

“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,” said David M. Solomon, chairman and CEO of Goldman Sachs in a company statement. 

“GreenSky and its talented team have built an impressive, cloud-native platform that will allow Marcus to reach a new and active set of merchants and customers and provide them with an expanding set of solutions,” he added.

The deal is expected to close by the first quarter of 2022.

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