Goldman Bankers Join Walmart’s Efforts to Tackle Wall Street
Goldman Sachs’ head of consumer credit, Omer Ismail, and one of its top executives, David Stark, are both leaving to join a fintech start-up backed by Walmart and Ribbit Capital.
The hires represent a milestone in the world’s largest retailer ‘s second big effort to enter financial services, after scrapping plans to start a bank more than a decade ago, under pressure from regulators.
Walmart and Ribbit provided little information on the start-up, which was announcement in January, other than to say that it “would deliver technology-driven financial experiences tailored to Walmart customers and associates.” It will be majority owned by the retailer, and the companies have said “growth could come from partnerships and acquisitions.”
Ismail was chosen to head the consumer division of Goldman, known as Marcus, less than six months ago, succeeding founding chief Harit Talwar. A graduate of Dartmouth College and Harvard Business School, Ismail has been with Goldman since 2002. Stark, a Goldman partner who has worked at Marcus since its inception almost five years ago, was recently appointed head of partnerships within the company. ‘unity. 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% from 2019, but a small fraction of Goldman’s total. He had $ 8 billion in loans outstanding at the end of the year, split between credit card loans and installment loans, plus $ 97 billion in deposits.
Ribbit Capital is one of Robinhood’s main backers. This provided over $ 500 million in convertible debt financing to the equity trading platform when it needed to increase its capital reserves with Gamestop and other “meme” stocks trading at unprecedented volumes and in a context of savage price volatility. Ribbit, founded in 2012, is led by Venezuelan venture capitalist Micky Malka.
Goldman Sachs said in a statement that Marcus “has serious momentum and a deep and growing pool of talent. We wish these two good luck. Walmart did not respond to a request for comment.
Walmart had attempted to form a bank after the turn of the century, but withdrew its application for a US banking charter in 2007, after facing resistance of the Federal Deposit Insurance Corporation.
Non-bank companies are generally prohibited from owning banks in the United States. But Walmart had applied for an industrial loan company charter, a special banking license that allows certain companies, like car manufacturers, to lend to their customers. Walmart’s claim was hotly contested by the banking industry.
Recently another regulatory body, the Office of the Comptroller of the Currency, had offers a light banking charter for fintech companies that don’t take deposits. This proposal also met immediate resistance from bank lobbyists.
Ed Mills, policy analyst at broker Raymond James, said: “What’s interesting is that banks have spent the past 15 years struggling with Walmart getting a bank charter, but what has changed is that Walmart is no longer the biggest threat to the banking industry – technology and fintech are. They spent so much time winning this battle, but did they lose the war? “