Financial software provider Intuit agreed today to buy US-based credit management platform developer Credit Karma for $7.1bn, allowing internet technology group Alphabet to exit.
The transaction involves a mixture of cash and shares and the price is near doubles the $4bn valuation at which Silver Lake made a $500m secondary investment in the company in early 2018. It includes almost $1bn in equity awards that will be issued over the next three years.
Credit Karma has created an online platform with more than 100 million members who can get free access to their credit scores and online identity status in addition to filing their taxes and finding credit card and consumer loan deals.
Intuit is best known for tax preparation software platform TurboTax and the potential acquisition would be the largest in its history. Credit Karma is set to maintain its independence as an Intuit subsidiary after the deal closes.
The transaction will come in the wake of some $369m in primary funding for Credit Karma since it was founded in 2007. It most recently raised $175m from Tiger Global Management, Valinor Management and Viking Global Investors in 2015 at a $3.5bn valuation.
Alphabet first invested in March 2014 through growth equity unit CapitalG (then Google Capital) as part of an $85m series C round that included Tiger Global and existing backers Susquehanna Growth Equity – part of trading firm Susquehanna International Group – and Ribbit Capital.
The series C valued the company at less than $1bn. It added $75m six months later in a series D round featuring CapitalG, Susquehanna Growth Equity and Tiger Global, and its earlier investors include Felicis Ventures, Founders Fund, QED Investors and SV Angel.
Intuit’s chief executive, Sasan Goodarzi, said: “Our mission is to power prosperity around the world with a bold goal of doubling the household savings rate for customers on our platform. We wake up every day trying to help consumers make ends meet.
By joining forces with Credit Karma, we can create a personalised 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 have always dreamed about, pay for education and take the vacation they have always wanted.”
This article was amended on February 25 due to the issuing of an official statement.
