Need to Know
- Software giant Intuit agrees to acquire Credit Karma for approximately $7.1 billion in cash and stocks.
- Intuit, the accounting, tax filing and financial planning software most known for its wildly popular platforms QuickBooks, TurboTax, and Mint plans to keep Credit Karma operating as its own entity under the leadership of CEO Kenneth Lin.
- Credit Karma currently makes more than $1 billion in annual revenue and presently has the largest engaged member base in consumer digital finance with more than 100 million members.
- By merging the two companies, Intuit plan to be better equipped to help solve the personal finance problems that consumers face today, regardless of their financial situation—including managing debt, maximizing savings, access to better credit cards and loans.
- Intuit currently serves approximately 50 million customers worldwide.
Intuit’s announced purchase of Credit Karma marks the giant’s biggest-ever acquisition to date and one of the biggest in the category of privately-held fintech companies. Not only is the size of the purchase impressive—it will cost Intuit $7.1 billion in cash and stock—but it now means that the newly formed partnership will oversee transaction data acquired from Intuit’s programs, consumer insight data from Credit Karma, and access to Credit Karma’s growing, largely millennial userbase.
“We started Credit Karma with a goal to build a trusted destination for all consumers, to make financial progress regardless of where they are in life,” said Kenneth Lin, founder and CEO of Credit Karma in a press release. “We saw the opportunity to enrich people’s financial lives through transparency, simplicity and certainty.”
Credit Karma has been essentially offering free-of-charge services, allowing it’s more than 100 million registered users the ability to check their credit scores, shop for credit cards and loans, file taxes and more, making its money off of selling relevant, related products to users through its wide range of partners in its marketplace. Since its launch in 2007, the company has nearly tripled the growth of its member base over the past five years and reports more than $1 billion in annual revenue. Add that to the power of Intuit’s network and you have a personalized financial program capable of helping customers at nearly every stage of their financial journey.
“Our mission is to power prosperity around the world with a bold goal of doubling the household savings rate for customers on our platform,” said Sasan Goodarzi, CEO of Intuit in a press release.
“We wake up every day trying to help consumers make ends meet. By joining forces with Credit Karma, we can create a personalized financial assistant that will help consumers find the right financial products, put more money in their pockets and provide insights and advice, enabling them to buy the home they’ve always dreamed about, pay for education and take the vacation they’ve always wanted,” Goodarzi added.
Despite its size, this is not the first shakeup to happen in the fintech industry. Visa recently purchased fintech data network Plaid for $5.3 billion allowing Visa to expand its market opportunities and enhance payment capabilities for partners. Paypal expanded its customer offering with the purchase of Honey, a browser extension that helps e-commerce shoppers find online coupons and discounts and apply them to their shopping cart at checkout.
The numerous acquisitions and sheer dollar values attached to the purchases show that the fintech market is booming. Intuit’s purchase of Credit Karma stands out amongst the rest due to the massive size of both networks and the acquisition price.