TurboTax owner Intuit and consumer finance company Credit Karma are teaming up in a $7.1 billion combination that aims to shift the landscape of consumer financial services.
By joining forces, Intuit and Credit Karma seek to create a personalized financial assistant that will provide insights and advice to help consumers find the right financial products.
“There hasn’t been that much innovation in the financial services world in the past two decades,” Kenneth Lin, founder and chief executive of Credit Karma, told USA TODAY on Monday. “The combination of the two companies will really be able to move consumers forward.”
The deal brings together two well-known personal finance companies. Intuit is the maker of Mint and TurboTax, the online tax filing service used by millions of Americans to file taxes.
Getting married?:5 tax breaks that can make it easier to cope with wedding costs
Credit Karma, which makes money through credit cards and loans, has more than 100 million members in the U.S., Canada and U.K., including almost half of all U.S. millennials. It generated $1 billion in revenue in 2019. Credit Karma will remain separate after the deal closes.
“Why this works so well is that we’re able to maintain our independence while leveraging the capabilities and resources of Intuit,” Lin says. “The two businesses are highly aligned, so from an investor perspective they shouldn’t expect anything different.”
The announcement confirms early news reports.
The companies said they expect the deal to close in the second half of 2020, pending regulatory approval.
If the cash and stock deal doesn’t fall through, Intuit and Credit Karma would be the latest financial technology companies to join forces this year.
Morgan Stanley announced plans to buy E*Trade last week for about $13 billion. The deal gives the big bank access to brokerage customers and employees with company stock.
Visa announced plans in January to purchase the fintech company Plaid for $5.3 billion, giving the payment processing giant access to other types of money transfer systems.
Contributing: Dalvin Brown, USA TODAY