Thousands of small IT service providers leverage Intuit’s financial and business software. Acquiring Credit Karma would potentially allow those small business owners to better track, build and manage toward their personal financial goals.
Credit Karma is privately held. The company’s venture capital and private equity backers include Silver Lake and Ribbit Capital.
Credit Karma, founded by Kenneth Lin, had nearly $1 billion in unaudited revenue in calendar year 2019, up 20 percent from the previous year, Intuit says.
In a prepared statement about the deal, Intuit CEO Sasan Goodarzi said:
“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. 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.”
Added Credit Karma’s Lin:
“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. 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.”
Intuit Acquiring Credit Karma: Company Backgrounds
Credit Karma, founded in 2007, is a consumer technology company with more than 100 million members in the United States, U.K. and Canada — including almost half of all U.S. millennials, the company says. In addition to offering free credit scores, the platform allows members to track their financial goals, including identity monitoring, applying for credit cards, and shop for loans. The platform also offer high-yield savings accounts through a bank partner, MVB Bank, Inc., Member FDIC.
By contrast, Intuit’s software and cloud services portfolio includes Quicken for bookkeeping, Mint for online budgeting, and TurboTax for tax preparation.
Still, there may be some product and service overlap — particularly the free Credit Karma Tax, which may overlap with Intuit TurboTax.
Intuit Business Evolution
Like many small business and consumer software providers, Intuit has largely evolve d toward SaaS-oriented cloud subscription services.
The business evolution included a CEO transition. Long-time leader Brad Smith stepped down at the end of December 2018, transitioning the CEO post to Sasan Goodarzi. Earlier, Goodarzi was executive VP and general manager of Intuit’s Small Business and Self-Employed Group.
For its Q2 of fiscal 2020, which ended ended January 31, 2020, Intuit says:
Total revenue was $1.7 billion, up 13 percent.
Small Business and Self-Employed Group revenue grew 17 percent to $973 million.
Small Business Online Ecosystem revenue grew by 35 percent.
Consumer Group revenue grew by 8 percent to $499 million.
Article originally published February 23, 2020. Updated February 25, 2020, with M&A deal confirmation and statements from company leaders.