Intuit, the accounting, tax filing and financial planning software giant behind TurboTax, QuickBooks and Mint, confirmed this Monday that it’s nearing a deal to acquire Credit Karma, the consumer technology platform with more than 100 million members. Credit Karma has nearly $1 billion in unaudited revenue in calendar year 2019 (up 20% from the previous year), and seven acquired organizations, including Haven Money, a finance management services provider that caters to millennials’ financial needs. Credit Karma is most known for offering free credit monitoring service since 2007 and free tax preparation and filing software since 2015, which made Credit Karma a strong competitor to Intuit’s popular TurboTax software.
The acquisition brings together two major fintech industry players and promises to be more effective and efficient in helping consumers manage their debts, maximize savings, have access to actionable insights, and better credit card offers. Many American consumers struggle to fully understand where they stand with their finances, as well as what effects their credit score. Household debt in the United States has now hit $14.1 trillion including $9.6 trillion in mortgage debt and nearly $1 trillion in credit card debt.
Intuit plans to keep Credit Karma as a standalone operation, run by CEO and cofounder Kenneth Lin, with a bold goal of “doubling the household savings rate” for customers. “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,” said Sasan Goodarzi, CEO of Intuit.
Intuit and Credit Karma will tackle the financial illiteracy problem by leveraging artificial intelligence and connections to over 100 financial partners to help consumers find financial products by matching consumers with pre-approved offers on credit cards with competitive interest rates and by connecting consumers to higher yield savings accounts, among others.
Most of us probably have a Credit Karma account, so what are the potential outcomes of this merger for our individual financial well being? Intuit can now tap Credit Karma’s customer base and range of services and allow Credit Karma’s customers to see a wider range of financial services available to them. Intuit will also probably upsell those users to Intuit’s premium paid services.