Goldman Sachs’ head of consumer finance, Omer Ismail, and one of its top executives, David Stark, are both leaving to join a fintech venture backed by Walmart and Ribbit Capital.
The lease is a major step in the second major attempt by the world’s largest retailer to enter financial services, after abandoning its plan to start a bank more than ten years ago under pressure from regulators.
Walmart and Ribbit provided little information about the launch, which was announced in January, except to say that it will “deliver technology-driven financial experiences applied to Walmart’s customers and associates.” The retailer will own it in the majority, and the companies said “growth can come through partnerships and acquisitions.”
Ismail was appointed less than six months ago as leader of Goldman’s consumer division, known as Marcus, by taking over founding head Harit Talwar. Ismail is a graduate of Dartmouth College and Harvard Business School and has been with Goldman since 2002. Stark, a Goldman partner who has been with Marcus since its inception nearly five years ago, has recently been in charge of partnerships at the unit. He played a key role in establishing the credit card partnership with Apple.
In 2020, Marcus generated just under $ 1.2 billion in revenue, up 40 percent from 2019, but a small fraction of Goldman’s total. There were $ 8 billion in outstanding loans at the end of the year, split between credit card and installment loans, and it had $ 97 billion in deposits.
Ribbit Capital is a major supporter of Robinhood. It offers more than $ 500 million in convertible debt financing to the stock trading platform when it had to increase its capital buffers with Gamestop and other ‘meme’ stocks trading at unprecedented volumes and amid price volatility. Founded in 2012, Ribbit is led by Venezuelan venture capitalist Micky Malka.
Goldman Sachs said in a statement that Marcus’ has serious momentum and a deep and growing talent pool. We wish these two well. Walmart did not respond to a request for comment.
Walmart tried to establish a bank after the turn of the century, but withdrew its application for a US bank charter in 2007 after it was opposed by the Federal Deposit Insurance Corporation.
Non-banking businesses are generally prohibited from owning banks in the US. But Walmart has applied for a charter for industrial lending, a special banking license that allows certain businesses, such as automakers, to lend to their customers. The banking industry vehemently opposed the Walmart application.
Recently, another regulator, the Office of the Currency Controller, proposed a light banking charter for fintech companies that do not take deposits. The proposal also met with immediate resistance from bank lobbyists.
Ed Mills, a policy analyst at broker Raymond James, said: ‘The interesting thing is that banks have been fighting Walmart for the past fifteen years to get a banking charter, but what has changed is that Walmart is no longer the biggest threat. for the banking industry – technology and fintech. They spent so much time winning that battle, but did they lose the war? ‘