M&A is all the rage these days, especially in financial services. This year has already seen over $26bn in transactions with Visa's purchase of Plaid for $5.3bn, Worldline buying Ingenico for $8.6bn, and Morgan Stanley buying E*Trade for $13bn. Now, according to reports by the WSJ, Intuit (makers of QuickBooks and TurboTax) is near a deal to buy personal-finance portal Credit Karma for about $7bn in cash and stock.
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
As lines blur between consumer and enterprise buyers, for Intuit to build a product bench that touches a customer more than once a year around tax time is a smart move. While not a done deal yet (there is supposedly some more fine print to work out), this deal rationale makes sense, particularly considering obvious cross sell opportunities.Read more...