With the acquisition, Goldman Sachs will enhance its consumer banking platform. Here are the top-line bullets you need to know.
Who are the parties to the deal?
- GreenSky: Georgia-based GreenSky is a fintech company that provides buy now, pay later (BNPL) solutions to merchants, enabling them to expand payment options for their customers and increase sales. It maintains a network of more than 10,000 merchants and 4M customers that have financed more than $30B of purchases. The company went public at a valuation of $4.28B in May 2018 and posted revenue of $525.6M in 2020. The company estimates it will see transaction volumes of $6.2 to $6.5B in 2021.
- Goldman Sachs: New York-based Goldman Sachs offers a suite of financial products and services, including investment and consumer banking; securities; and advisory to financial institutions, governments, and individuals. The company reported that net revenue grew by 22% in 2020 to reach a value of $44.6B. It also claims to have added around 300 clients to its investment banking portfolio last year. As of August 2021, the company had 40,500 employees, and it also maintains offices in North America, Europe, UAE, Australia, Africa, and Asia.
Why does the market matter?
- The global digital lending platform market is projected to grow at a CAGR of 18.13% to reach a value of $27.07B by 2028, according to Verified Market Research.
- Today, BNPL accounts for a small portion of the overall spending on payment cards (including credit, debit, and prepaid cards) — the US sees around $8T in overall spending annually. However, BNPL is at an inflection point. By 2025, the global BNPL industry is expected to experience a 10-15x increase in spending volume, surpassing an estimated $1T in annual gross merchandise volume. This growth trajectory has attracted incumbent attention and moved them to improve the digital user experience.
- In 2021, BNPL players have set an annual funding record, as they have seen over $2.1B in equity funding across 20 deals. There have been major acquisitions in this space as well, such as Square acquiring AfterPay for $29B.