Goldman Sachs is planning to ramp up its presence among middle-market corporates, according to its Chief Executive Officer David Solomon.
Reports in Reuters Tuesday (Feb. 12) said Solomon spoke at a Florida conference hosted by Credit Suisse, and delved into Goldman’s plans to expand its corporate services, including cash management, and diversify its customer base. Part of that effort means expanding in the middle-market community.
“There are lots and lots of companies with value at $500 million to $3 billion,” he said. “There’s real … expansion opportunity for the firm … to open the aperture of corporations that we bring Goldman Sachs to.”
His remarks follow Goldman’s previous announcement that it is developing a digital platform for companies to manage payments and cash receipts across borders. The company plans to become the platform’s first user when it launches in 2020, and then expand the solution to more clients.
The tool will heighten Goldman’s position against key players in the corporate cash management space, including Citigroup and JPMorgan. Analysts at Oliver Wyman said in January that the wholesale payments and cash management market yielded an estimated $250 billion in revenue in 2017 for big banks.
According to Solomon, targeting smaller businesses and introducing new corporate financial solutions, like cash management tools, can add “a couple of million dollars in revenue” for the company. “You can move the needle over a period of time with reasonable investments,” he said.
Reports noted that Solomon, who took up the CEO position last October, is aiming to pull Goldman into yearly revenues of $5 billion.
The firm’s push into the middle market comes as Goldman is investing in smaller companies, too. Earlier this week Goldman Sachs led a $44 million investment round for Nav, a platform linking small business owners to their credit score and financing options. In January, Goldman also backed Capify, a U.K. and Australia-based alternative finance provider targeting small businesses.