Goldman Sachs’ head of consumer finance division, Omer Ismail, and one of its top executives, David Stark, are leaving to join a fintech startup supported by Walmart and Ribbit Capital.
The hiring represents a major step in the second major effort by the world’s largest retailer to get into financial services, after abandoning its plan to open a bank more than a decade ago, under pressure from regulators.
Walmart and Ribbit provided little information about the start-up, which was announced in January, in addition to saying that “it would provide financial experiences geared to technology tailored for Walmart customers and associates”. It will be mostly owned by the retailer and companies say that “growth can come through partnerships and acquisitions”.
Ismail was appointed to lead Goldman’s consumer division, known as Marcus, less than six months ago, replacing 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 been with Marcus since its founding almost five years ago, was recently 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, 40% more than in 2019, but a small fraction of Goldman’s total. It had $ 8 billion in outstanding loans at the end of the year, split between credit cards and installment loans, to go with $ 97 billion in deposits.
Ribbit Capital is a major sponsor of Robinhood. It provided more than $ 500 million in convertible debt financing to the stock trading platform when it needed to increase its capital buffers with Gamestop and other “meme” stocks traded in unprecedented volumes and amid wild price volatility. Ribbit, founded in 2012, is led by Venezuelan venture capitalist Micky Malka.
Goldman Sachs said in a statement that Marcus “has great momentum and a deep and growing talent pool. We wish these two the best. ”Walmart did not respond to a request for comment.
Walmart tried to open a bank after the turn of the century, but withdrew its application for authorization from a bank in the United States in 2007, after facing resistance from the Federal Deposit Insurance Corporation.
Non-banking companies are generally prohibited from owning banks in the USA. But Walmart had applied for an industrial loan company license, a special bank license that allows certain companies, such as auto manufacturers, to make loans to their customers. The Walmart app was vehemently contested by the banking industry.
Recently, another regulator, the Office of the Currency Controller, proposed a superficial bank license for fintech companies that do not accept deposits. This proposal also met with immediate resistance from bank lobbyists.
Ed Mills, policy analyst at brokerage Raymond James, said: “Interestingly, banks have spent the past 15 years fighting Walmart to get a bank permit, but what has changed is that Walmart is no longer the biggest threat to the banking sector – technology and fintech. They spent a lot of time winning that battle, but did they lose the war? “