A deal to acquire Credit Karma would help Intuit to strengthen its position in the online personal finance and consumer finance spaces.
Intuit, a US business and financial software company, is reportedly nearing a deal to acquire Credit Karma, a US multinational personal finance company, for approximately $7 billion. A cash and stock deal for the acquisition of Credit Karma would help Intuit to move deeper into the consumer finance space. According to sources, this would be Intuit’s biggest-ever acquisition deal, if materialized. Acquiring Credit Karma would help Intuit to achieve a position of strength in the online personal finance space. Sources say Intuit has a value of about $77 billion. In a private share sale almost a couple of years ago, Credit Karma was valued at around $4 billion.
If Intuit acquires Credit Karma, Credit Karma CEO Kenneth Lin would continue to head the company. Furthermore, Credit Karma is expected to function as a separate entity, if a deal is signed between the two companies.
Deal would help Intuit and Credit Karma to improve recommendations to customers
With significant expansion of the amount of financial data Intuit and Credit Karma have access to, if the deal goes forward, the companies would be able to improve their recommendations to customers. Credit Karma provides several services, which include tax filing and preparation, alerts to potential data breaches, and free access to one’s borrowing history and credit score. The company is presently backed by Ribbit Capital and Silver Lake. In February 2020, it announced a new tax-savings integration empowering members to earn and save interest on their refund all within Credit Karma.
Intuit is popular for its TurboTax online tax filing service. The company offers four TurboTax Live Products, viz. TurboTax Live Self-Employed, TurboTax Live Premier, TurboTax Live Deluxe, and TurboTax Live Basic. In 2019, it earned around $6.8 billion in revenue. It operates in 20 locations in 9 countries within Asia Pacific, EMEA, and the Americas and has over 9,000 employees worldwide.