Intuit Eyes Millennials With $7B Credit Karma Buy

Daniel Fowler
February 27, 2020

"Our mission is to boost prosperity worldwide with the bold goal of doubling the household savings rate for customers on our platform", Goodarzi said in a statement.

Intuit CEO Sasan Goodarzi, left, and Credit Karma founder and CEO Kenneth Lin are photographed at Intuit Headquarters on February 20, 2020 in Mountain View, Calif. Credit Karma is a consumer technology platform with over 100 million members in the U.S., Canada, and the United Kingdom for approximately $7.1 billion in cash and stock.

Credit Karma offers its customers free access to their credit scores and borrowing history, alerts to possible data breaches, credit monitoring and tax preparation and filing. These customers don't pay the corporate for any of its products and services, and Credit Karma makes cash via an associate price it receives when any person effectively applies for a mortgage or bank card on its platform.

Intuit (NASDAQ:INTU) +2.9% will acquire Credit Karma for $7.1B in cash and stock, which includes $1B of equity awards that will be expensed over up to three years. The company reportedly had been considering pursuing an initial public offering this year but balked at the prospect because of mixed IPO results from large tech floats in 2019.

Credit Karma was founded 13 years ago. It intends to use Credit Karma to craft a "personalized financial assistant" that provides insights into your money and helps you "find the right financial products".

"(The) combination could offer significant data advantages" said KeyBanc Capital Markets analyst Josh Beck, "while potentially providing a launching pad for future innovative financial services".

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Intuit shares closed down 3.39% to $287.50. The the vast majority of conditions and deaths remain centered in China, but the immediate unfold to other elements of the entire world has spooked markets and lifted fears that it will harm the world-wide economic climate.

Intuit's Credit Karma acquisition is one for books. Credit Karma's sale bid also underscores the hastening trend of fintech companies going for outright sale rather than entering the primary market, according to the report. With this acquisition, Intuit is further expanding into the personal finance related tools and software space which it already dominates with popular tools like Mint.com which helps people keep track of their budget and expenses, and TurboTax which helps people file their taxes.

The company reported crossing $500 million in revenues in 2017 (meaning it's more than doubled revenues in the last two years), and it used that momentum to move into global services and more.

A spokesperson for Credit Karma said the company does not comment on rumors or speculation. It earns a commission every time someone accepts a new credit card or loan offer that it advertises.

A $500 million secondary round in 2018, at a $4 billion valuation, helped put off those plans for a while.

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