Intuit to Acquire Credit Karma for $7.1 Billion
- Intuit will pay $7.1 in cash and stocks to buy one of the leading financial technology startups Credit Karma
- Credit Karma, which says it has more than 100 million customers, will keep running independently under the CEO Kenneth Lin
- Intel reports quarterly revenue of $1.7 billion, up 13%, earnings miss estimates
Intuit announced on Monday that it will pay $7.1 billion to acquire Credit Karma, one of the most used financial applications among younger consumers.
Intuit will pay for the deal with a combination of cash and stock. The takeover will create a financial technology giant that will serve as an online financial assistant for consumers, help them boost their credit scores, file taxes, find loans etc.
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“This is very core to what we’ve declared around helping our customers make ends meet and make smart money decisions,” said Sasan Goodarzi, Intuit’s CEO.
Intuit published its quarterly earnings report today, which shows a revenue growth of 13% on revenues of $1.7 billion, higher than analysts’ expectations of $1.68 billion. Still, it failed to meet analysts’ average estimates for earnings per share, as it reported non-GAAP earnings per share of $1,00 lower than the estimated $1.03.
Credit Karma is one of the leading financial technology startup companies, as they allowed and stimulated younger users to make their financial decisions online. In return for its services, Credit Karma charges users through data and ads, just like on social networks.
“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,” Goodarzi added.
According to Credit Karma, its customer base amounts to 100 million, out of which a third are all Americans who own a credit profile, as well as 50% of all millennials. On the other hand, Intuit’s customer base is twice as small, as it is one of the older financial companies.
However, Intuit has been looking how to attract younger consumers’ attention and better utilize its consumer data.
Intuit will let Credit Karma run independently, managed by current Chief Executive and co-founder Kenneth Lin. Credit Karma generated over $1 billion in revenues last year, 20% higher than in 2018.