According to the New York Times the long awaited online lending platform from Goldman Sachs now has a name: Marcus. This name was chosen in honor of one of the founding partners of the firm, Marcus Goldman.
We first wrote about the new Goldman Sachs initiative in June of last year. The new platform has long been known as Mosaic and details have been very hard to come by but as Goldman gets closer to a launch date more information is slowly coming out.
Goldman has been building out its online lending platform since early last year. They hired Harit Talwar, a former executive with Discover, to lead the effort and they have also been looking to hire people from Lending Club and Prosper. They supposedly have built a team of around 100 people now – a much larger pre-launch team than any other company I have come across.
It looks like Marcus will initially offer consumer loans in the $15,000 to $20,000 range – that is the sweet spot for Lending Club, Prosper and many other online lenders. I assume these will be three or five year loans and that they will be targeting prime borrowers. We will know more shortly as the New York Times says they are targeting an October launch date.
Goldman Sachs – A Curious Consumer Lender
Clearly, they couldn’t go to market with the Goldman Sachs brand to a consumer demographic so I think you will find their corporate brand completely absent from this offering. It will likely be Marcus Corporation branding with no mention of the parent company on their consumer facing website.
I always thought it was curious that Goldman Sachs was entering the consumer lending business when they have spent most of the past 150 years serving wealthy individuals and corporations. They have zero experience in serving the middle class demographic.
But whether you like them or not Goldman has a reputation for hiring some of the smartest people in finance. Clearly, they see consumer lending as an opportunity worth pursuing. They will have a huge advantage over all non-bank lenders as far as cost of capital goes so they should be able to offer better rates. How they compete beyond price on such things as user experience or customer acquisition remains to be seen.
The online lending industry is about to enter a new era with the arrival of Marcus. It is going to be fascinating to see how this plays out.
Peter Renton is the chairman and co-founder of LendIt Fintech, the world’s first and largest digital media and events company focused on fintech. Peter has been writing about fintech since 2010 and he is the author and creator of the Fintech One-on-One Podcast, the first and longest-running fintech interview series. Peter has been interviewed by the Wall Street Journal, Bloomberg, The New York Times, CNBC, CNN, Fortune, NPR, Fox Business News, the Financial Times, and dozens of other publications.