Jessica Ellerm is a thought leader specializing in Small Business and the Gig Economy and is the CEO and Co-Founder of Zuper, a neowealth disruptor in Australia
Small business accounting powerhouse Intuit has snapped up personal finance platform Credit Karma for a cool US $7.1 billion in cash and stock. It’s the latest large M&A in the fintech space, following hot on the heels of Visa’s acquisition of Plaid, for US$5.3B, and PayPal’s acquisition of rewards platform Honey for US$4B.
The acquisition by Intuit is further proof they are bullish about their stated goal of becoming an ‘A.I. driven expert platform,’ as they embed themselves further into the personal finance space.
It certainly doesn’t mean the business is leaving behind the small business sector – in many respects it seems to have realised, possibly sooner than many of its competitors, the tight correlation between consumer and small business finance needs. Win one, and you no doubt win the other.
Proof that SMEs are still core to Intuit’s success can be found in the global corporation’s latest numbers.
In the second quarter of Intuit’s fiscal year, which ended January 31 2020, the business reported revenue growth in its Small Business and Self-Employed Group of 17 percent. This was against a broader revenue uplift of 13 percent across the group. Revenue in the company’s Small Business Ecosystem grew 35 percent.
Intuit has stated that the acquisition of Credit Karma will grow the company’s Total Addressable Market (TAM) to US$275B, specifically increasing the TAM for the consumer segment for Intuit from $29B to $57B.
Credit Karma also gives Intuit access to more engaged members. While Intuit claims to serve around 50 million customers globally, Credit Karma brings with it 106 million customers across the US and Canada. Not only that, it has 37 million monthly active users, that engage with the Credit Karma platform over 4x per month.
Not one to let Xero dominate the SaaS market, Intuit’s acquisition of Credit Karma is a true show of muscle in the sector. Certainly it will be interesting to watch this battle play out over the coming years.