One of the leading Fintech companies, Intuit, announced on Monday that it will be acquiring Credit Karma, another private Fintech start-up, for USD 7.1 billion to be paid in cash and stocks. Intuit is the parent company of QuickBooks,a software that helps in small business accounting, Mint, a software which users can use to maintain their personal finances, and TurboTax, a software that calculates taxes for the user.Credit Karmacollects financial details from consumers and generates their credit scores for free. It then sells loans and credit cards to its consumers and earns commission for every loan or credit card bought through its platform.
Intuit detailed out its plans with the acquisition of Credit Karma and said that they’ll look to build a digital personalized finance assistant for its users. The assistant will assess the user’s credit scores, offer best credit card and loan options, and also keep a track of their monthly finances. User financial data has become one of the most valuable asset in the private Fintech industry and has thus made companies who own it highly valuable. Credit Karma’s USD 7.1 billion evaluation is partly due to the amount of data it holds and partly due to the services it offers. Plaid, an identical software to Credit Karma that handles user finance data, was acquired by Visa last year for over USD 5 billion. The deal is expected to be closed by second half of 2020.
Intuit announced the deal while also announcing its earning report for the fourth quarter of 2019. The company reported a growth in revenue by 13 percent year on year. The positive earnings report showed instant impact on the share market as Intuit’s shares were up almost 2 percent during the post trading hours on Monday.