Goldman is said to spend $100 mln on Clarity Money

Goldman Sachs is buying Clarity Money, the personal-finance startup started by Adam Dell a little more than a year ago, two sources said.

The investment bank is paying about $100 million for Clarity, the sources said.

Adam Dell, the brother of Michael Dell, launched Clarity in January 2017.  The app uses artificial intelligence, along with data science, to help consumers manage their finances including helping them find a better credit card or cancel wasteful accounts.

The app in September said it had over 500,000 users and analyzed more than $60 billion in transactions.

Clarity, New York, raised about $15 million in venture funding, PitchBook said. A March 2017 Series B round led by RRE Ventures and Citi Ventures collected $11 million. An A round in 2016 raised $3.5 million from Bessemer Venture Partners, Soros Capital and Maveron Ventures. SV Angel is also an investor, Clarity Money’s website said.

Bloomberg in February reported Goldman’s discussions with Clarity. The investment bank plans to fold Clarity into its Marcus online lender, the story said.

Marcus provides unsecured loans, online savings accounts and CDs for consumers. Launched in 2016, Marcus says its loans, ranging from $3,500 to $40,000, are free of fees and come with lower rates than many credit cards. Marcus competes against other online lenders including Lending Club, SoFi and Prosper.

Marcus has huge credit firepower, Crowdfund Insider said. In 2016, Goldman acquired the online deposit platform of GE Capital Bank, giving it access to about $16 billion of deposits. That’s grown to more than $17 billion, Crowdfund Insider said in February.

The New York investment bank may be looking to expand its retail business in the U.K., the Financial Times reported in September. The IB may add a consumer lending arm in that country, like Zopa or RateSetter, the story said.

“Goldman is moving aggressively into consumer financial services,” one industry source said. Banks, the source said, realize that they can access very cheap capital that, combined with their technology, risk management and operational capabilities, can deliver some very profitable consumer products.

Look for Goldman to continue buying companies and teams that have a track record of using massive data to build products and add value for consumers, the person said. “Consumer banking has become very interesting again,” the source said.

Clarity, RRE, Citi, Soros, SV Angel and Maveron could not be reached for comment. Executives for Goldman and Bessemer declined comment.

Action Item: Contact Adam Dell at +1 512-485-1900

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