Goldman Sachs adds to tech capabilities through acquisition of Honest Dollar
Goldman Sachs (GS) is adding more technology to its investment-banking arm with its acquisition of Honest Dollar, an Austin-based digital retirement savings tool. It is a web-based and mobile-based retirement savings platform aimed at serving 45 million Americans who currently do not have access to employer-provided retirement schemes. This transaction is expected to close in the second quarter of 2016. After that, Honest Dollar will continue to operate from Austin. The terms of the deal were not disclosed.
“Honest Dollar has created a simple solution to a complex retirement savings problem,” Timothy O’Neill and Eric Lane, co-heads of investment management at Goldman Sachs, said in a statement. “Together, we have the potential to help millions of people achieve their investing goals.”
“We set out with a singular focus: to revolutionize the retirement industry and reach individuals who historically have been underserved,” said William Hurley, CEO of Honest Dollar. “We look forward to being part of Goldman Sachs as we drive innovation across this space together.”
This deal is one of many moves by Goldman Sachs to expand its technology capabilities and provide cheaper services. Earlier last year, the company launched an online lending business for new customers and started a new ETF. Other banks (XLF) (KBE) that have partnered with fintechs are J.P. Morgan (JPM) and BlackRock. Last year, J.P. Morgan (JPM) partnered with On Deck Capital to provide loans to small businesses while BlackRock (BLK) acquired Future Advisor, an online provider of automated investment advice. Similarly, Northwestern Mutual Life Insurance purchased LearnVest, an online financial planning service.