Intuit buys Credit Karma for $7.1B in cash, stock

Intuit is officially buying credit-score company Credit Karma for $7.1 billion, and the stock is spiking

Intuit is officially buying credit-score company Credit Karma for $7.1 billion, and the stock is spiking

Intuit, the software giant behind TurboTax, is buying personal finance website Credit Karma for about $7.1 billion in cash and stock.

Credit Karma, the San Francisco-headquartered fintech firm which previous year opened an office in Leeds, is set to be acquired by Intuit in a $7.1billion deal.

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 based in San Francisco and was founded in 2007 by Kenneth Lin, its current CEO and others. From healthcare to technology to other financial services deals, it's not uncommon to see one, or both, companies doing the M&A dance to begin to slim down in anticipation of culture integrations (and, staffing redundancies, as the merger parlance goes, or, firings and layoffs, to the rest of us).

The acquisition is an obvious fit for Intuit, where it will serve two purposes.

Credit Karma offers users free access to credit scores and information about financial products.

Under the deal, Credit Karma would continue to connect consumers to financial institutions and operate as a separate company.

The deal would mark Intuit's largest acquisition by far in its 37-year history and the first sizable transaction under Chief Executive Sasan Goodarzi, who took over a little more than a year ago. It has a track record of acquiring startups with big potential and running with them.

Mahathir resigns as prime minister, Anwar meets King
The Malaysian King has appointed Dr Mahathir to be the interim prime minister until a new government can be formed. The government denied accusations that his imprisonment was politically motivated.

Intuit shares closed down 3.39% to $287.50.

Intuit's shares were up almost 2% after market. "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".

In the case of Credit Karma, the company has been offering the free tax filing service as a way to collect personal details on consumers, so that it can recommend the most appropriate financial products, such as an auto or home loan.

Perhaps most importantly, the services offered by Credit Karma are free, truly living up to its ethos. The firm generated $500 million in fees in 2016, and it was reported that 2017 brought in $680 in revenue.

A spokesperson for Credit Karma said the company does not comment on rumors or speculation.

Real estate companies and utilities also declined, though they held up better than the rest of the market as investors pushed money into safe-play stocks.

"Credit Karma provides the consumer a certainty of finding the right product at the right rate", Lin said. FinTech finds out more.

Recommended News

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.