Module 5: Software+Finance Investing
Module 5 Description
We will explore the financial technology private investment landscape, zeroing in on the internal and external strategic implications of the firm's shift to a more active approach to venture and growth stage stage investing, and how this shift might shed light on the financial industry's broader transformation.
Study Questions
How are the PSI group’s activities and responsibilities different from standalone growth equity or venture investing platforms?
Evaluate PSI through the lens of our “Wall Street Economics Becoming Software Economics” framework. How is the PSI group emblematic of the dichotomies breaking down across the financial industry, and what are the potential synergies/opportunities and hazards/conflicts that PSI’s investment activity might create for GS’ broader organization?
What strategic implications does Symphony’s success have for GS and its other large financial institution investors? Who is disrupting whom?
Of the recent PSI investments you read about, which excites you most and why?
Can you pick out any overarching trends from the four unicorns featured in the readings? Business model? Revenue growth? Something else?
Reading List
Required
Articles on PSI and GS' recent investment activity:
Son, Hugh, There’s a secretive tech fund inside Goldman Sachs transforming the bank and returning 25% a year, CNBC, 3 May 2019.
Azevedo, Mary Anne,A Look at Goldman Sachs’ Venture Funding Spree, Crunchbase, 19 September 2019.
Symphony:
Lunden, Ingrid, Symphony, a messaging app that’s been a hit with wall street raises $165M at a $1.4BN valuation, Techcrunch, 12 June 2019.
Noonan, Laura and Szalay, Eva,Symphony will not go public until it is profitable, says chief, Financial Times, 13 October 2019 (Available Behind Paywall).
Selected Recent PSI Investments:
Detrixe, John, Goldman Sachs is betting on a startup that battles low interest rates for savers, Quartz, 16 July 2019.
Morrell, Alex, A little-known startup just grabbed a $180 million valuation from Goldman Sachs and American Express to be the 'Google Flights' of digital lending, Business Insider, 4 September 2019 (Available Behind Paywall).
Dilts, Elizabeth, Goldman Sachs, Point72 and others invest $42 million in Mexico's Credijusto, Reuters, 29 August 2019.
DiligenceVault Receives Series A Funding Led by Goldman Sachs to Accelerate Growth, Newsfile, 23 October 2019.
Perez, Sarah, Goldman Sachs leads $50M round for credit card platform Deserve, Techcrunch, 4 November 2019.
Butcher, Mike, Tradeshift raises $250M Series E, Goldman Sachs joins the round, Techcrunch 29 May 2018.
Visible Alpha Raises $38 Million in New Funding Round, Led by Goldman Sachs, PR Newswire, 18 Jan 2018.
Selected Fintech Unicorns:
About Robinhood (Our Mission, Our story, How Robinhood Makes Money)
Roof, Katie, Robinhood Is Raising New Funds at About $8 Billion Value, Sources Say, Bloomberg, 15 April 2020. (Available Behind Paywall).
Fuscaldo, Donna, Digital Bank Chime Now Has A Valuation Of $5.8 Billion, Forbes, 5 December 2019 (Available Behind Paywall).
Megaw, Nicholas, Revolut points to ‘viability’ after increasing revenues, Financial Times, 30 September 2019. (Available Behind Paywall).
Megaw, Nicholas, Revolut plans hiring spree in customer service and compliance, Financial Times, 1 September 2019 (Available Behind Paywall).
Platt, Eric and Fontanella-Khan, James,Intuit agrees $7.1bn deal to buy Credit Karma, Financial Times, 24 February 2020 (Available Behind Paywall).
Covid Impacts:
How Covid-19 Is Impacting Fintech Financing, CB Insights, 2 April 2020.
Optional
Miller, Ron, H20.ai announces $72.5M Series D Led by Goldman Sachs,Techcrunch, 20 August 2019.
Azevedo, Mary Anne, CallMiner Raises $75M From Goldman Sachs, Crunchbase, 16 December 2019.
Second Measure Closes $20M Series A Funding Co-Led by Bessemer and Goldman Sachs, PR Newswire, 12 Feb 2019.
Irrera, Anna, Goldman Sachs leads $10 million investment round in data startup Crux,Reuters, 8 November 2017.