Intuit has agreed to acquire Credit Karma for approximately $7.1 billion in cash and stocks, the companies announced Monday.
Intuit (INTU) is the maker of tax preparation software TurboTax, small business accounting software QuickBooks and personal finance manager platform Mint. The acquisition of Credit Karma pushes Intuit (INTU) further into the world of consumer finance technology.
Credit Karma, founded in 2007, provides free credit score monitoring for consumers. In exchange, it makes money by recommending financial products such as credit cards and loans based on those consumers’ financial data, and earns commission on any sales. The company made nearly $1 billion in unaudited revenue during calendar year 2019, up 20% from the previous year, according to a Monday press release.
Following the acquisition, Intuit said it plans to use Credit Karma’s assets to create a digital personalized finance assistant, a platform that gives users access to their personal finance information such as income and credit history, as well as information about financial products and other advice.
“There’s a lot of innovation and investment in FinTech, but we don’t see anyone, with our collective capabilities, pursuing a personalized financial assistant to help consumers take control of their financial lives,” Intuit CEO Sasan Goodarzi said in the release. “We’re going to bring together consumers and financial institutions in innovative ways that lower costs for all those involved and level the playing field for consumers regardless of their economic status. We believe we can transform the personal finance industry and power the economy.”
As more and more financial transactions occur digitally, access to consumers’ financial data is highly valuable. Last month, another fintech startup that handles consumer financial data, Plaid, was bought by Visa (V) for $5.3 billion.
The Intuit-Credit Karma acquisition is expected to close in the second half of 2020, subject to regulatory approvals.
Intuit announced the deal at the same time it reported earnings for the three months ending in January, including revenue growth of 13% from the prior year. The company’s shares were up around 2% in after hours trading Monday. Ad Feedback Ad Feedback Ad Feedback
Credit Karma is one of the most popular and widely used financial services companies in the United States. But who actually owns this fintech giant? The ownership history of Credit Karma reveals an impressive startup story and how the company grew to become a billion-dollar acquisition target.
The Founding of Credit Karma
Credit Karma was founded in 2007 by Kenneth Lin, Ryan Graciano, and Nichole Mustard The company was launched out of San Francisco with the goal of making credit information more accessible and transparent for consumers
Prior to starting Credit Karma, founder Kenneth Lin had experience in the fintech industry working at companies like E-Loan and Upromise. He saw an opportunity to create a platform offering free credit scores, reports, and monitoring services. The website went live in 2008.
In the early days, Credit Karma raised seed funding from investors like Prosper CEO Chris Larson and former E-Loan president Mark Lefanowicz. This allowed the startup to refine its products and start acquiring users.
Venture Capital Backing Accelerates Growth
By 2009, Credit Karma had proven its model enough to raise its Series A round, securing $25 million from investors like QED Investors and Founders Fund This capital allowed the company to continue expanding its user base.
The growth of Credit Karma really accelerated in 2013 and 2014. In 2013, they raised $30 million in a round led by Ribbit Capital to fund more expansion. Then in 2014, a massive $85 million Series C round led by CapitalG (formerly Google Capital) gave Credit Karma the resources to scale up significantly.
At this point, Credit Karma was valued at around $1 billion and had over 40 million members. The company was cementing itself as a leader in the free online credit score and credit report space.
Credit Karma Diversifies Offerings with Acquisitions
In 2015 and 2016, Credit Karma started acquiring companies to expand beyond just credit scores and reporting:
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They acquired the notifications app Snowball to improve user engagement.
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The acquisition of Claimdog allowed them to add unclaimed funds matching capabilities.
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They bought AFJC Corporation and launched Credit Karma Tax to enter the tax preparation market.
These acquisitions helped Credit Karma diversify its product offerings beyond just credit tracking and matching tools. The company was maturing from a startup to a more integrated personal finance platform.
Intuit Buys Credit Karma for $7.1 Billion
After over a decade of impressive growth, Credit Karma was bought by software company Intuit in 2020 for $7.1 billion in cash and stock. Intuit is the company behind popular products like TurboTax, QuickBooks, and Mint.
The acquisition came after Credit Karma raised more than $350 million in total venture funding and reached over 100 million users. Intuit was looking to expand further into consumer finance, and Credit Karma’s large user base made it very attractive.
However, Intuit did have to sell off Credit Karma’s tax preparation business to Square for $50 million to avoid antitrust issues with its TurboTax product. But the combination still made sense given Credit Karma’s breadth of other offerings.
Credit Karma Today
Today, Credit Karma operates as a subsidiary of Intuit but still functions fairly autonomously. Founder Kenneth Lin remains CEO of Credit Karma.
The company has expanded internationally and now operates in the United States, Canada, and the United Kingdom. Credit Karma continues to provide free credit scores, reports, monitoring, recommendations, and educational resources to over 110 million members.
Intuit provides data and resources that allow Credit Karma to keep enhancing its product offerings. For example, Credit Karma can now offer more accurate loan and credit card eligibility matching.
While no longer an independent startup, the mission-driven company still aims to help consumers improve their financial lives through transparency and education. The founders’ impressive journey built Credit Karma from the ground up into one of the most impactful fintech companies in the world.
Key Takeaways on Credit Karma’s Ownership:
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Founded in 2007 by Kenneth Lin, Ryan Graciano, and Nichole Mustard
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CapitalG, Founders Fund, Ribbit Capital, and others funded the early growth
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Went from startup to fintech leader with over 100M users
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Intuit acquired Credit Karma in 2020 for $7.1 billion
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Operates as an Intuit subsidiary led by founder Kenneth Lin
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Now has over 110 million members across the US, Canada, and UK
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Fear & Greed Index
Intuit has agreed to acquire Credit Karma for approximately $7.1 billion in cash and stocks, the companies announced Monday.
Intuit (INTU) is the maker of tax preparation software TurboTax, small business accounting software QuickBooks and personal finance manager platform Mint. The acquisition of Credit Karma pushes Intuit (INTU) further into the world of consumer finance technology.
Credit Karma, founded in 2007, provides free credit score monitoring for consumers. In exchange, it makes money by recommending financial products such as credit cards and loans based on those consumers’ financial data, and earns commission on any sales. The company made nearly $1 billion in unaudited revenue during calendar year 2019, up 20% from the previous year, according to a Monday press release.
Following the acquisition, Intuit said it plans to use Credit Karma’s assets to create a digital personalized finance assistant, a platform that gives users access to their personal finance information such as income and credit history, as well as information about financial products and other advice.
“There’s a lot of innovation and investment in FinTech, but we don’t see anyone, with our collective capabilities, pursuing a personalized financial assistant to help consumers take control of their financial lives,” Intuit CEO Sasan Goodarzi said in the release. “We’re going to bring together consumers and financial institutions in innovative ways that lower costs for all those involved and level the playing field for consumers regardless of their economic status. We believe we can transform the personal finance industry and power the economy.”
As more and more financial transactions occur digitally, access to consumers’ financial data is highly valuable. Last month, another fintech startup that handles consumer financial data, Plaid, was bought by Visa (V) for $5.3 billion.
The Intuit-Credit Karma acquisition is expected to close in the second half of 2020, subject to regulatory approvals.
Intuit announced the deal at the same time it reported earnings for the three months ending in January, including revenue growth of 13% from the prior year. The company’s shares were up around 2% in after hours trading Monday. Ad Feedback Ad Feedback Ad Feedback
Who Owns And Operates Credit Karma? – Consumer Laws For You
FAQ
Who bought out Credit Karma?
In December 2020, Intuit acquired Credit Karma for approximately $7.1 billion.
What bank is behind Credit Karma?
Credit Karma is not a bank. We partner with MVB Bank, Inc., Member FDIC, to provide banking services supporting Credit Karma Money Spend and Credit Karma Money Save accounts. When you open a Credit Karma Money Spend account, your funds will be deposited into an account at MVB Bank, Inc. and its deposit network.
Can Credit Karma be trusted?
Who is Credit Karma run by?
Credit Karma is part of the Intuit group of companies alongside Quickbooks, Mailchimp and Turbotax.
Is Credit Karma owned by Intuit?
After the acquisition was successfully completed, Credit Karma carried on operating under the Intuit brand, utilizing the resources and know-how of the business to expand its reach and offerings. As of today, Credit Karma is wholly owned by Intuit.
Who owns Credit Karma?
As of today, Credit Karma is wholly owned by Intuit. Through the acquisition, Credit Karma is now able to take advantage of Intuit’s extensive background in the financial software sector, which will help the company keep developing and growing its offerings. Under Intuit’s ownership, Credit Karma is poised for continued growth and development.
How does Credit Karma make money?
Credit Karma earns revenue from lenders, who pay the company when Credit Karma successfully recommends customers to the lenders. Who owns Credit Karma? Credit Karma was started in 2007 by Kenneth Lin, the current chief executive, and two co-founders, after Mr. Lin had trouble acquiring his own credit score.
How much is Credit Karma worth?
Credit Karma is in the business of providing free credit score tracking—but apparently it’s worth billions to Intuit, which just closed its acquisition of the company in a deal valued at $8.1 billion including cash and stock. That’s up from the original value of $7.1 billion when the deal was initially announced in February.
What is Credit Karma?
Credit Karma is an American multinational personal finance company founded in 2007. It has been a brand of Intuit since December 2020. It is best known as a free credit and financial management platform, but its features also include monitoring of unclaimed property databases and a tool to identify and dispute credit report errors.
How old is Credit Karma?
Credit Karma is a 13-year-old startup with 110 million members. Intuit was intrigued by the reach of Credit Karma.