TurboTax maker is spending $7.1 billion to buy Credit Karma, a free tax service competitor
Intuit has reached a deal to acquire Credit Karma, a company known for offering free credit score checks. The acquisition gives Intuit — which owns TurboTax, Quickbooks, and Mint — another set of consumer-oriented financial products. It also knocks out a potentially serious competitor: Credit Karma has been offering free tax filing services since 2017, possibly taking away customers from TurboTax.
That’s a serious consequence of this merger. Over the past year, Intuit has been highly criticized for its handling of free tax filing, haven been caught actively hiding a tax-filing product it promised the IRS it would give away for free and steering customers toward paid products. It’s theoretically bad news if the company behind those policies takes control of another free-to-use alternative.
Credit Karma had been expected to go public this year. Instead, it’s accepting $7.1 billion in cash and stock from Intuit to be acquired. The deal is expected to close in the second half of 2020.
Founded in 2007, Credit Karma is known for offering key services for free — like credit checks, which, in the past, were generally a paid product — and making money later off of additional financial services it offers to customers once it has their information. That includes offering credit cards and loans from partners, then getting a fee from referring the customer. Credit Karma promises its service “will always be free.”