FinTech: Goldman Sachs Snaps Up BNPL Fintech Greensky For $2.24B

September 16, 2021 | FinTech, News, Takeovers and Buyouts

Goldman Sachs intends to boost its consumer-facing financial services business.

Goldman Sachs (NYSE: GS) announced Wednesday its all-stock acquisition of GreenSky (NASDAQ: GSKY), a fintech lender specializing in BNPL home improvement loans, for $2.24 billion. Goldman Sachs said the transaction would help accelerate its efforts to “create the consumer banking platform of the future.” (BusinessWire)

Goldman Sachs pushes into consumer finance

Founded in 2006, GreenSky listed in 2018 and has provided home improvement loans to about 4 million customers. The deal value translates to about $12.11 per GreenSky share – a premium of 56% on the fintech’s Tuesday closing price.

Fortune observed that Goldman Sachs is acquiring Greensky at roughly half the $23 price it listed at in 2018. Interestingly, the bank was one of the lead underwriters of the GreenSky IPO.

The deal marks another thrust by Goldman Sachs into consumer finance after its initial foray into retail banking five years ago with its Marcus product. The Wall Street giant will now get access to GreenSky’s network of more than 10,000 merchants.

“Aligning GreenSky’s unique capabilities and growing user base with the expanding products of Marcus by Goldman Sachs creates a compelling banking platform positioned for significant growth,” the investment bank said in a statement.

Under its business model, GreenSky offers larger value BNPL financing for purchases including home improvements and surgeries on its platform. Companies such as Home Depot (NYSE: HD) and medical practices can offer financing backed by GreenSky to their customers. In turn, GreenSky onward-sells these loans to other financiers such as banks.

BNPL deal-making

Also, Goldman’s acquisition is another in a recent spate of big-ticket deals in the BNPL space in the fintech sector.

In August, Jack Dorsey-led Square (NYSE: SQ) acquired Australian fintech and buy-now-pay-later (BNPL) leader Afterpay (ASX: APT) for $29 billion in an all-stock deal.

The same month, Affirm (NASDAQ: AFRM) announced it is partnering with Amazon (NASDAQ: AMZN) on a buy-now-pay-later (BNPL) solution to be made available by Affirm to customers.

Earlier this month, PayPal (NASDAQ: PYPL) acquired Paidy, a Japanese payments platform and BNPL provider for ¥300 billion or approximately US$2.7 billion, principally in cash.

The Goldman-GreenSky transaction, meanwhile, is expected to close in the fourth quarter of 2021 or first quarter of 2022.

Related Story: Square Plonks Down $29B For Aussie BNPL Giant Afterpay

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