Published: Thu, February 27, 2020
Markets | By Otis Pena

Intuit buying Credit Karma in $7.1B deal

Intuit buying Credit Karma in $7.1B deal

More than 30 million consumers log into Credit rating Karma just about every week, the organization has reported.

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. Kenneth moved to Las Vegas with his family from China at age four, where his mother was a casino dealer and his father was a cook. The company earns revenue when someone utilizes its services to apply for a loan or credit card. If the consumer decides to obtain the loan, Credit Karma receives a cut. South Korean virus cases jumped again Wednesday and the US military confirmed its first case among soldiers based in the Asian country. The company reiterated its fiscal 2020 outlook for revenue of $7.44 billion to $7.54 billion.

Intuit, the financial software firm that owns tax filing software TurboTax, budgeting app Mint, and accounting software Quickbooks, has agreed to buy the credit monitoring app Credit Karma for a whopping $7.1 billion in cash and stock.

And this is also where Credit Karma comes in. A look at the data from each company signals key points around the M&A discussions, as well as the rationale for Intuit to go out and spend about 1/10 its market capitalization. The service offers free credit scores and reports from national credit bureaus TransUnion and Equifax.

The week begins with an important piece of mergers and acquisitions in the world of new financial technology companies. In addition to providing credit scores from TransUnion and Equifax, Credit Karma offers advice on how the ratings could be improved by doing things like lowering credit card balances.

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A person looks at Intuit TurboTax software on display at a retailer in Foster City, California.

The deal is only the latest in a slew of acquisitions in the industry.

Credit Karma will keep offering its free tax assistance app, Lin said. Credit Karma, which has its headquarters in San Francisco, was founded in 2007 and based on the belief that people should have free access to their credit and financial data, according to its website.

Intuit will pay for the deal with a combination of cash and stock. "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". It looks like Kismet. It will be interesting to see how Intuit integrates. How will issuers react to this all?

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