Intuit Acquiring Credit Karma For A Massive $7.1 Billion
26 Feb 2020
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- The acquisition will enable Intuit to progress in the development of an innovative digital assistant that would help customers manage their personal finances in a better way.
- In 2019, Credit Karma’s unaudited revenue figures reached almost $1 billion, an increase of around 20% from figures reported in 2018.
- According to Goodarzi, the CEO of Intuit, the company aims to make it easier and less costly for financial service providers and customers to interact in the market through such innovative technological solutions.
In a recent announcement
, it has been revealed that the company Intuit would be acquiring Credit Karma for a sum of approximately $7.1 billion, to be paid in cash and stocks. Intuit is known for having developed a number of financial applications including TurboTax, an application that helps with preparation of taxes, QuickBooks, an accounting software for small businesses, and Mint, a platform for managing personal finances. The acquisition of Credit Karma would help Intuit increase its footprint in the consumer finance industry. Credit Karma was founded back in 2007 and provides consumers with a free service to monitor their credit scores. The company earns a commission from credit companies by recommending their financial products, such as credit cards or loan products, to customers based upon their credit scores. In 2019, Credit Karma’s unaudited revenue figures reached almost $1 billion, an increase of around 20% from figures reported in 2018. According to reports, Intuit would be using Credit Karma’s existing assets to create a digital assistant for personal financial management. On this platform, customers would be able to access information pertaining to their personal finances including historical data about their income and debt, and also gain insight into various financial products and receive advice. Sasan Goodarzi, who is the CEO of Intuit, believes that the consumer finance market still lacks that collective effort by companies to deliver personalized assistance to customers, helping them manage their finances in a better way. According to Goodarzi, Intuit aims to make it easier and less costly for financial service providers and customers to interact in the market through such innovative technological solutions. The rapid increase in the number of digital transactions has pushed the demand for digitally-available financial data of consumers even higher. Companies are doing away with paperwork and automating the credit approval processes to make it faster and easier for customers to access credit products. For this exact reason, in January, Plaid was acquired by Visa for a whopping $5.3 billion. Plaid is another fintech company that was innovating in the management of financial data pertaining to consumers. Once regulatory approvals are given, it is expected that the acquisition of Credit Karma by Intuit would be completed in the second half of this year. Intuit’s recently announced earnings for the three months ending January showed the company having increased its YoY revenue by 13%, an announcement that pushed the company’s share price up by almost 2% on Monday.