Goldman Sachs’ struggles with digital bank Marcus


Hi. I am Aaron Weinman. Today I want to highlight a deep dive about Marcus. This is the foray of Wall Street giant Goldman Sachs on Main Street.

Let’s go.

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A phone displaying a hologram of the CEO, coins rolling in a hole, and bank clerks.

Anna Kim / Insider

1. High turnover, executive tensions and mounting losses at Goldman Sachs’ Marcus have stifled the bank’s efforts to encroach on Main Street. It quickly becomes a defining moment for general manager David Solomon.

The executives had big plans for Marcus – an online bank, named after founder Marcus Goldman, that offers high-yield savings accounts. Marcus was created as a stand-alone entity with a popcorn machine and employees wearing jeans – a nod to the informal startup culture evident in places like Silicon Valley.

Despite the forward-thinking initiative, Solomon grew increasingly frustrated as Goldman’s stock price apparently did not reflect the promise to build a consumer digital bank.

Analysts have also argued that management teams – who are sometimes too close to a project – become seduced by its potential without seeing the same risks as investors. And when you have the Goldman Sachs bank account, it’s easy to continually throw money into a loss-making exercise, compared to a startup that needs to find third-party capital.

Now, five years after its launch, Marcus is burning through cash with little sign of profit. Executives expect it to lose another $1.2 billion this year.

Skyrocketing spending has frustrated Goldman’s No. 2, chairman and chief operating officer John Waldron, who now holds regular meetings with Marcus management to discuss how to cut costs.

For the full story, check out this feature from Insider’s Chief Financial Correspondent, Dakin Campbell.

ICYMI – here’s more from Marcus:

In other news:

Harley Finkelstein, President of Shopify

Harley Finkelstein, president of Shopify, touted the benefits of Bursts, or offsite trips.

Shopify/AP Images

2. Shopify has funded lavish team getaways to a French chateau and other remote locations. All this just weeks before the e-commerce company surprised workers with layoffs.

3. Elon Musk sold 7.92 million Tesla shares worth nearly $6.9 billion. Musk said he may need the funds if he loses the legal battle with Twitter and is forced to buy the social media platform for $44 billion. Musk, who now finds himself with a 15% stake in the electric car maker, explained his action in a late tweet on Tuesday.

4. OlympusDAO used to pay 7000% interest on its token, but is now being sued by a backer. A 22-year-old major from Weston, Connecticut is behind one of the most notorious projects in crypto, according to a lawsuit seeking $791 million.

5. Titan, the investment startup backed by Kevin Durant and Will Smith, is looking to buy another fintech. Joe Percoco, the company’s co-chief executive, details how struggling startups will be looking for an exit in the coming months, and he talked about Titan’s plans for more hiring.

6. Citi is hiring a decentralized finance and stablecoin risk manager as part of its push into crypto. The U.S. bank also plans to hire up to 100 people to create a digital assets division that will sit within Citi’s institutional client group, The Block reported.

7. The European bond market is experiencing its worst trading drought in at least eight years, according to Bloomberg. The market has gone 32 days without a single government or corporate debt offering.

8. Carlyle’s billionaire founders were fed up with their chosen successor, Kewsong Lee. Tensions mounted for months before his resignation, according to this Bloomberg story. Also, you can listen to me on Insider’s The Refresh discuss Kewsong’s release.

9. Private equity firms have gone from corporate raiders to teams of rivals. The industry was founded by traders who competed fiercely with their rivals, but today it’s a nuanced and complex relationship, according to this Financial Times article.

10. Chronic gut health startup Salvo Health just received $10.5 million in “supergiant” seed capital. Here’s the pitch deck the company used to secure the funding.

Offers concluded:

  • Lithium miner Wealth Minerals has signed an agreement with thyssenkrupp Mining Technologies. Under the terms, the pair will develop the Ollagüe Salar Lithium exploration project in northern Chile.
  • Blackstone has acquired the outstanding shares of student housing manager American Campus Communities for approximately $12.8 billion, including debt. Bank of America and KeyBanc Capital Markets advised ACC and Dentons was its legal counsel. Wells Fargo, JPMorgan, Citi, Goldman Sachs, Morgan Stanley, SMBC and TSB Capital Advisors advised Blackstone, while Simpson Thacher & Bartlett served as its legal counsel.

Organized by Aaron Weinman in New York. Tips? E-mail [email protected] or tweet @aaronw11. Edited by Hallam Bullock (tweet @hallam_bullock) in London.


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