Intuit Near Deal to Buy Credit Karma for $7 Billion
By Cara Lombardo and Dana Cimilluca
Intuit Inc. is nearing a deal to buy personal-finance portal
Credit Karma Inc. for about $7 billion in cash and stock, in a move
that would push the bookkeeping-software giant further into
consumer finance, according to people familiar with the matter.
The maker of TurboTax could announce a deal to buy privately
held Credit Karma by Monday, assuming talks don't fall apart, the
people said. Credit Karma was valued at roughly $4 billion in a
private share sale about two years ago.
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
Credit Karma offers its customers free access to their credit
scores and borrowing history, alerts to possible data breaches,
credit monitoring and tax preparation and filing. Customers in turn
receive offers from other companies for credit cards and loans
tailored to their credit history, and Credit Karma makes money when
customers use those products.
Adding the buzzy startup to its stable would give Intuit a
stronger foothold in the burgeoning realm of online personal
finance. In addition to TurboTax, the online software that millions
of people use to file their taxes, Intuit's offerings include
QuickBooks bookkeeping software used by businesses and Mint, an
online-budgeting platform that also pitches individuals financial
products. Intuit has a market value of roughly $77 billion.
Under the deal being discussed, Credit Karma would operate as a
stand-alone unit with its chief executive, Kenneth Lin, remaining
in charge, one of the people said. But joining forces could allow
both Credit Karma and Intuit to fine-tune their recommendations to
customers by expanding the trove of financial data they use to make
The move would cap a rapid rise for Credit Karma, which is
backed by funders including private-equity firm Silver Lake and
financial-technology venture firm Ribbit Capital. Based in San
Francisco and founded in 2007 by Mr. Lin, Nichole Mustard and Ryan
Graciano, Credit Karma at one point was eyeing an initial public
offering no earlier than late 2019.
But the IPO market has looked more dubious after the
disappointing debuts of some startups including Uber Technologies
Inc. The merger market, especially for financial technology
companies, has remained strong. Such deals have accounted for
several of the largest transactions announced so far this year,
including Morgan Stanley's $13 billion purchase of E*Trade
Financial Corp., announced this past week, and Visa Inc.'s $5.3
billion acquisition of startup Plaid Inc. announced last month.
Mountain View, Calif.-based Intuit was founded in 1983 and went
public in 1993. Best-known for its bookkeeping software, the
company has said it wants to push further into the finances of the
individuals and businesses it serves by adding more offerings to
its platform. It is set to report its fiscal second-quarter
earnings Monday afternoon.
Write to Cara Lombardo at firstname.lastname@example.org and Dana
Cimilluca at email@example.com
(END) Dow Jones Newswires
February 23, 2020 00:12 ET (05:12 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.