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 gets paid by suggesting credit cards and loans to customers based on their financial information, and it gets a cut of any sales. According to a press release issued Monday, the company made nearly $1 billion in unaudited revenue in 2019, up 2020% from the previous year.
After buying Credit Karma, Intuit said it would use Credit Karma’s assets to make a digital personalized finance assistant. This would be a platform where users could see their personal finance information, like their income and credit history, as well as get advice and information about financial products.
“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
Credit Karma was started by Kenneth Lin, who had worked in the fintech industry before at companies like E-Loan and Upromise. He saw a chance to make a website that gave away free credit scores, reports, and monitoring services. The website went live in 2008.
In its early stages, Credit Karma got money from investors such as Chris Larson, CEO of Prosper, and Mark Lefanowicz, former president of E-Loan. This helped the new company improve its products and start getting customers.
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.
Credit Karma’s growth really sped up in 2013 and 2014. They raised $30 million in 2013 in a round led by Ribbit Capital to pay for more growth. In 2014, Credit Karma got a huge $85 million Series C round led by CapitalG (formerly Google Capital). This gave the company the money it needed to grow a lot.
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
Credit Karma began buying other businesses in 2015 and 2016 to offer more than just credit scores and reports:
-
They acquired the notifications app Snowball to improve user engagement.
-
The acquisition of Claimdog allowed them to add unclaimed funds matching capabilities.
-
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:
-
Founded in 2007 by Kenneth Lin, Ryan Graciano, and Nichole Mustard
-
CapitalG, Founders Fund, Ribbit Capital, and others funded the early growth
-
Went from startup to fintech leader with over 100M users
-
Intuit acquired Credit Karma in 2020 for $7.1 billion
-
Operates as an Intuit subsidiary led by founder Kenneth Lin
-
Now has over 110 million members across the US, Canada, and UK
CNN values your feedback How relevant is this ad to you? 2. Did you encounter any technical issues? Video player was slow to load content Video content never loaded Ad froze or did not finish loading Video content did not start after ad Audio on ad was too loud Other issues Ad never loaded Ad prevented/slowed the page from loading Content moved around while ad loaded Ad was repetitive to ads I’ve seen previously Other issues Thank You! Your effort and contribution in providing this feedback is much appreciated. Close Ad Feedback
Fear & Greed Index
Intuit has agreed to acquire Credit Karma for approximately $7.1 billion in cash and stocks, the companies announced Monday.
The tax software TurboTax, the small business accounting software QuickBooks, and the personal finance manager platform Mint are all made by Intuit (INTU). 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.
After buying Credit Karma, Intuit said it would use Credit Karma’s assets to make a digital personalized finance assistant. This would be a platform where users could see their personal finance information, like their income and credit history, as well as get advice and information about financial products.
“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. “In new and creative ways, we’re going to bring together consumers and financial institutions. This will lower costs for everyone and give consumers of all income levels. 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
Is Credit Karma owned by Intuit?
Credit Karma continued to do business under the Intuit brand after the acquisition went through successfully. It used the business’s resources and know-how to grow 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 makes money from lenders, who pay the company when it successfully steers customers to 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?
Consumers can check their credit score for free with Credit Karma, but Intuit just bought the company for $8 billion, so it must be worth a lot of money to them. 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.
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.