Financial software behemoth Intuit – owner of QuickBooks, TurboTax and Mint – is splashing more than $7bn to get hold of Credit Karma and its 100 million customers.
Credit Karma provides financial and credit rating advice and support. Its free services are funded by partnership deals with credit card firms and other financial services. It claims 100 million users, with 37 million active in any given month.
The company said the deal, Intuit's largest ever purchase, will help it hit its target of doubling household savings by 2025.
Intuit boss Sasan Goodarzi said in a statement: "We wake up every day trying to help consumers make ends meet. 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."
In a conference call, Goodarzi expanded on plans to offer a personalised financial assistant to find the right products for customers and ease the application processes.
Noting that the impetus for the deal was customer numbers and data, he said: "Customers are going to be able to leverage their own data, their income data, their spending data, their credit history, their life situations."
The deal announcement said that 23 million US citizens relied on at least one payday loan in 2018 and total household debt stands at $14 trillion.
Credit Karma boss Ken Lin, who is keeping his job, said its recommendations were based on 8 billion model predictions every day.
Credit Karma will remain a standalone business for now and its owners will get paid half in cash and half in Intuit shares. There is an additional $1bn in share awards for Karma executives and staff dependent on future growth over the next three years.
The deal is subject to the usual regulatory hurdles but is expected to close in the second half of 2020.
For its calendar 2019, Intuit reported GAAP operating income of $1.9bn, up 19 per cent from $1.6bn and revenues for $6.8bn, up 13 per cent year over year. ®