TurboTax Maker Intuit to Buy Credit Karma in $7.1B Deal

TurboTax Maker Intuit to Buy Credit Karma in $7.1B Deal

TurboTax Maker Intuit to Buy Credit Karma in $7.1B Deal

One of its major business units today, Mint (for personal financial planning and management), is based on a startup of the same name that it bought in 2009 (for the relatively modest sum of $170 million).

On a call with analysts after the announcement, Goodarzi said after the deal closes, Credit Karma will remain separate, and CEO Kenneth Lin will report to Goodarzi.

By agreeing to acquire Credit Karma, a company with almost $1 billion in unaudited revenue in calendar year 2019, up 20% from the previous year, Intuit accelerates its mission of powering prosperity around the world.

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. It additionally knocks out a probably critical competitor: Credit score Karma has been providing free tax submitting companies since 2017, probably taking away prospects from TurboTax.

An Intuit purchase of Credit Karma would be merely the latest deal in the financial-services sector.

Lin will continue to lead Credit Karma from its headquarters in San Francisco. The deal would also help Intuit expand its customer base of 84 million people, as well as offer complementary services. Since then, the financial technology startup has introduced a number of other offerings including the ability to apply for a credit card, find an auto loan or even start a savings account.

The company gained traction as a provider of simulated credit information - it claims to have around 100 million registered users in the U.S. - but over the last few years it's been repositioning itself as a personal finance company.

The deal is Intuit's largest acquisition ever and the first big deal since Sasan Goodarzi took over as CEO about a year ago. The result is going 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.

Similar to Credit Karma's tax-season ratings-surge, Intuit apps in the Apple Store that help consumers navigate credit and tax season issues also saw similar dramatic increases in user input. Intuit has a market value of roughly $77 billion. The personal and small business financial software maker reported a Q2 net income of $240 million million, or 91 cents per share. It had a reported user base of almost 60 million in 2016. In return for its services, Credit Karma charges users through data and ads, just like on social networks.

Credit Karma helps consumers by giving them certainty and transparency around the products that are right for them, he said. Another fintech startup, Plaid Inc, sold itself in a $5.3 billion deal to Visa Inc last month.

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