Intuit is buying credit score app Credit Karma for about $7.1 billion in a move to expand its financial product offerings.
The acquisition, the largest ever for Intuit, will give the maker of TurboTax and QuickBooks financial software access to one of the most popular financial applications for young consumers.
Credit Karma gives users access to their credit scores and then uses the information to provide them with advertisements for new credit cards and loans. It earns a commission every time someone accepts a new credit card or loan offer that it advertises.
“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,” Intuit CEO Sasan Goodarzi said in a news release.
Intuit owns the budgeting site Mint but according to Engadget, “it doesn’t have a credit tool quite like Credit Karma —Turbo is as close as it gets.”
“Intuit can tap Credit Karma’s customer base and range of services … to complement those it already offers [and] to help upsell those users to Intuit’s premium, paid services,” TechCrunch said. “And Intuit can use it to grow its wider business by tapping a set of consumers — typically younger users — that Credit Karma has possibly been more successful in capturing than Intuit has.”
Credit Karma was co-founded in 2007 by Kenneth Lin, who is the chief executive, after he had trouble acquiring his own credit score. “Unlike many start-ups, Credit Karma has a proven business model and reliable revenue,” The New York Times noted.
The startup made $1 billion in revenue last year, up 20% from 2018, and has more than 100 million members, including a third of all Americans who have a credit profile and half of all U.S. millennials.
“The complementary strengths of our combined companies will help us to invest in innovation, build faster and deliver products our consumers expect and deserve,” Lin said.
Kimberly White/Getty Images for TurboTax