Why Marcus Has Changed Everything
Back in 2015 when the news first surfaced it seemed truly remarkable. Goldman Sachs was
thinking about launching an online consumer lending platform. We all wondered how serious
they really were. After all, this is the company that has only ever focused on the wealthiest of
individuals and the largest of companies as their clients. Not exactly the right background for a
consumer facing product targeting middle America.
It was somewhat surreal when the moment came in October 2016 and Marcus launched. They
had a singular focus on debt consolidation loans up to $35,000, the core product of the leading
companies in the online lending space like LendingClub, Prosper and Marlette.
Many of us, myself included, didn’t think they would do well. These aforementioned companies
had years of experience and a long history of refining their credit models and application
funnels into borrower acquisition machines. But when Marcus launched their user experience
was actually good. Really good. They had clearly done their homework and were taking this
Fast forward almost 18 months and Marcus is the fastest growing online lender in history. They
have lent $2.5 billion in this time to 350,000 customers and have 700 employees spread across
three offices. Not only that, but they have grand ambitions in the space. Goldman Sachs CEO
Lloyd Blankfein has repeatedly talked about the importance of Marcus to the future of
According to a recent article in the Wall Street Journal the consumer banking business of
Goldman Sachs is expected to generate $1 billion in revenue for the firm by 2020. That is
significantly more revenue than LendingClub is expected to generate in 2018 as an 11-year- old
All of this has caught the attention of many other large banks. We have heard that Barclays and
PNC Financial will be launching their own lending platforms in 2018 and there are rumors that
many other large banks are going to do the same.
What was started by Prosper and LendingClub could, in the near future, be taken over by the
banks. And I believe that Marcus has been the catalyst for this change. Love or hate Goldman
Sachs the large banks pay attention to them. They see Marcus quickly becoming a dominant
player in a new competitive market and they don’t want to miss out.
What has been interesting to me is that most of the large banks, including Goldman, have
chosen to build their own lending platform rather than buy one of the leading online lenders.
Of course, that may change with valuations where they are today but so far banks have chosen
to go this alone for the most part.
Having said that Goldman has been the most active when it comes to mind. It all began with a
major acquisition of the deposit book from GE Capital in 2016. They acquired the savings
platform Honest Dollar also in 2016 and they have acquihired talent from BondStreet in the
small business space. Last year they acquired Genesis Capital in the commercial real estate
space and in January this year they acquired credit card startup Final.
Goldman is proving to be a leader here and I have no doubt many other banks will follow. Here
at LendIt Fintech, we are getting close to our next big conference in April and we have noticed
an interesting trend. Almost 30% of our attendees who have registered so far are bankers. This
is up from 14% in 2017. Banks big and small know they need to have a fintech strategy and I
believe much of this increased interest is a result of the success of Marcus.
As we peer into the future it is not difficult to imagine the online lending space dominated by
banks. And if that does come to pass it will be Goldman Sachs that provided the catalyst for this
Peter Renton is the co-founder of LendIt Fintech and the founder of Lend Academy. He has been
writing about online lending and fintech since 2010. LendIt’s next event, LendIt Fintech USA
2018, will take place April 9-11 in San Francisco.