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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.
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It’s now finally upon us. “The Empire Strikes Back” (or something like that).
Yeah, this is going to be so very interesting.
I have no doubt the folks at LC have spent the past year planning their response and competitive strategy.
Talk about a David and Goliath story. Can’t wait to see how it plays out.
Ha! The Empire indeed. I know that LC has been thinking about this for a long time. I didn’t mention this in the article but I asked Scott Sanborn at a conference late last year about GS. And he said that “he is looking forward to competing with GS on user experience.” It remains to be seen whether GS create a modern user experience or one that looks like a bank.
I’m not so convinced that they’ll be hiding their name from this new venture. Maybe they will, but they kept their name right out front with their consumer facing bank. https://www.gsbank.com
The bank is different I think. You want a bank that is well established with a lot of assets if you are thinking about depositing money. But will consumers feel the same way about borrowing money? I don’t think so.
Very valid point. I guess we’ll find out sometime soon. 🙂
The Financial Times reports this differently: the brand will be “Marcus by Goldman Sachs”
“Goldman’s new consumer lending arm, set to launch later this year, will be named “Marcus by Goldman Sachs” after the nearly 150-year-old company’s founder, Marcus Goldman, said a person close to the company.
The familiar first name, reportedly the product of extensive market research and lengthy internal discussions, sounds more like a Silicon Valley start-up than a Wall Street titan. Oscar, a US health insurance technology start-up, closed a $400m funding round earlier this year.
A person close to the company said market research had shown that target customers had also responded positively to the new brand’s association with Goldman Sachs.”
Hi Lisa,
I saw the Financial Times piece and I was surprised. I don’t know anything about this research and I still maintain that the GS brand will not have good resonance with the target market looking to take a loan. We will just have to wait and see.