Pagaya Founders (photo source company website)
Israeli fintech firm Pagaya is looking to acquire American financial technology company GreenSky from its parent company Goldman Sachs. Reports indicate that the deal could be worth as much as $800 million. According to Calcalist, the acquisition talks are in advanced stages, but Pagaya has some competition from firms like the Apollo investment fund and the growth investment firm Sixth Street.
Pagaya Management has had some troubles lately. In April, Pagaya suspended daily withdrawals from its Pagaya Opportunity Fund, Israel’s largest investment fund with about $1.38 billion in assets under management. The move was taken in response to an increase in requests by investors to withdraw their funds, possibly due to concerns over Israel’s political turmoil surrounding the government’s controversial judicial reform plan.
But this week Pagaya’s stock jumped after after JMP initiated the payments technology stock at Market Outperform. Analyst David M. Scharf told Seeking Alpha that the firm’s secular and business pipeline drivers are working in its favor, including the expansion of lenders within its personal loan and subprime auto markets; the buildout of its analytics engine for investors in the single-family rental market; its expansion into point-of-sale and buy now, pay later financing partners; and conversion of its pipeline discussions with the top 25 banks,
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Founded in 2006, GreenSky is a financial technology company Powering Commerce at the Point of Sale for a growing ecosystem of merchants, providers, and consumers. The firm boasts that its “highly scalable, proprietary and patented technology” platform enables merchants to offer “frictionless” promotional payment options to consumers, driving increased sales volume and accelerated cash flow. Since 2006, we GreenSky has approved over 4.9 million consumers and have financed over $38 billion of commerce using its paperless, real time “apply and buy” technology.
Goldman Sachs acquired GreenSky in 2021 for $2.4 billion, so the reported $800 million price tag clearly represents a large drop in value.
Founded in 2016 by CEO Gal Krubiner, Yahav Yulzari – a former Israeli soccer star — Avital Pardo and CEO Gal Krubiner, Pagaya Investments is a global financial technology company with new ways to handle institutional asset management. Focusing on fixed income and alternative credit, the company offers a variety of discretionary funds to institutional investors (including pension funds and sovereign wealth funds), insurance companies and banks. It boasts a suite of “unmatched artificial intelligence technologies and state-of-the-art algorithms delivers an exceptional, scalable performance edge in the digital lending space.”
Pagaya Technologies is a fintech company that has developed an algorithmic underwriting model for consumer credit. The investment policy is to invest in loans, gain interest and hold them until their repayment and/or sale, and reinvest the proceeds. The fund invests in consumer credit in the US and performs Cherry Picking for consumer credit, in accordance with the fund’s internal underwriting model developed by Pagaya Technologies.
