MOUNTAIN VIEW — Intuit, best known for TurboTax, QuickBooks and Mint software, has agreed to acquire Credit Karma, the consumer financial platform offering free credit scores and over 100 million members in the U.S., Canada and U.K., for up to $7.1 billion in cash and stock.
Credit Karma is based in San Francisco and had nearly $1 billion in unaudited revenue in fiscal 2019, up 20% from the previous year.
The deal brings together two technology leaders with a shared goal to help solve the personal finance problems that consumers face today, regardless of their financial situation — managing debt, maximizing savings, access to better credit cards and loans — with an aim to put more money in consumers’ pockets.
The total price tag of $7.1 billion for Credit Karma includes about $1 billion of equity awards that will be expensed over up to three years. Following the close of the deal, Intuit will issue approximately $300 million of restricted stock units to Credit Karma employees, which will be expensed over four years.
“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. “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.”
“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. “We saw the opportunity to enrich people’s financial lives through transparency, simplicity and certainty.”
Many consumers struggle with not knowing or not fully understanding where they stand with their finances. Household debt in the United States hit $14.1 trillion including, among other sources, $9.6 trillion in mortgage debt, nearly $1 trillion in credit card debt and $1.5 trillion in student loan debt. In addition, 23 million people relied on at least one payday loan in 2018 to get faster access to cash.
Intuit and Credit Karma will tackle these problems by making it simple for consumers to make better decisions with their money through a consumer finance platform that works like a personalized financial assistant, helping consumers find the right financial products, put more money in their pockets and have access to actionable insights and advice. This platform will provide consumers with transparent access to their critical personal finance information – including their income, spending, and credit history – to help them better understand their complete financial picture and use it to their advantage, such as for obtaining better interest rates, all with security in mind. The result will be a complete financial profile that puts the power in consumers’ hands so they can take the steps necessary to improve their financial health and maximize their money.
The platform, leveraging artificial intelligence and connections to over 100 financial partners, will help consumers:
- Find the right financial products by matching consumers with pre-approved offers on loans and credit cards with competitive interest rates that are right for them.
- Put more money in their pockets by connecting them to higher yield savings accounts and, in the future, will provide faster access to their hard-earned cash.
- Provide insights and advice to help consumers make better decisions about their money and improve their credit score.
Founded in 2007, Credit Karma has the largest engaged member base in consumer digital finance with more than 100 million members, with 37 million monthly active users of which 88% engage on mobile devices. The company has nearly tripled the growth of its member base over the past five years and created a marketplace comprised of more than 100 financial service providers.
“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,” Goodarzi said. “Together with Ken and the Credit Karma team, 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.”
“We could not have picked a better partner than Sasan and the Intuit team to accelerate our mission to champion financial progress for our members,” Lin added. “Together, the complementary strengths of our combined companies will help us to invest in innovation, build faster and deliver products our consumers expect and deserve.”