Goldman Sachs' Marcus shows just how difficult FinTech really is 😔; Can sustainable investing be the future? 🤔; Tokens not cards will be the future of payments 💳

Good Morning FinTech, 26 August

Good day Everyone,

And happy Friday! As someone famously said, there’s no better way to end the week than by reading Linas’s Newsletter… Ok, it was me 😎 But you will have to agree with me after today’s issue as we’re looking at Goldman Sachs' Marcus which shows just how difficult FinTech really is (+ some valuable lessons for others), asking whether sustainable investing is the future of investing (one startup believes that & it’s really interesting), and why tokens & not cards will be the future of payments (these aren’t the tokens you’re thinking about). So let’s jump straight into the interesting stuff:

Goldman Sachs' Marcus shows just how difficult FinTech really is 😔

The news 🗞 Striving to enter the rapidly growing challenger banking space and push for more diversification, one of the top investment banks Goldman Sachs GS 0.00%↑created Marcus. Yet, the consumer banking business of the investment banking giant is struggling and is yet to turn a profit.

More on this 👉 Goldman Sachs launched its Marcus in 2016 to expand its revenue streams by offering savings accounts to retail customers. Since then:

• ✅ Marcus has grown to offer small businesses loans, checking accounts, and a credit card with Apple Pay.

• ✅ The consumer business has generated more than $100B in deposits and has over 14M customers making it among the top “neobanks” globally.

• ✅ It brought in revenues of $1.5B in 2021, a number the bank says could hit $4B by 2024, according to FT.

• ✅ Partnerships with Apple and General Motors have also built its presence in the payments space and helped it reach new customers.

• ❌ Goldman Sachs has lost $4B on Marcus in the last 4 years (excluding acquisitions). That’s only a cool $2.7M per day 😬

• ❌ There’s still no path to making money.

Why is this important? 🤔 It’s a brilliant reminder that FinTech is hard (especially consumer FinTech). But there are more lessons to learn, so here’s the takeaway: