Just weeks after agreeing to acquire Credit Karma for $7 billion,
is considering buying another fintech firm, two people familiar with the matter said.
Intuit (ticker: INTU) is “looking hard” at Finicity, which is up for sale, these people said. Other possible targets include Credit Sesame and NerdWallet.
Finicity is expected to sell for $1 billion to $2 billion, while Credit Sesame could go for $500 million to $750 million. It’s unclear what NerdWallet might fetch.
Intuit, the tax-software company known for QuickBooks and TurboTax, confirmed Feb. 24 that it was acquiring Credit Karma for $7.1 billion. The merger combines two companies that aim to solve the personal finance problems of consumers, a statement said.
“We do not comment on speculations or rumors,” an Intuit spokeswoman said in an emailed response to questions.
Coronavirus-related volatility continued to weigh on the broad market Monday; Intuit’s shares dropped 4.3%, or $11.45, to $263.73 in morning trading.
Market volatility has slowed down many transactions, with some expecting a drop in M&A valuations. This could mean a buying opportunity. “There is a lot of money on the sidelines and I would expect companies to take advantage,” a banker said.
Finicity is a data aggregator; its Application Programming Interface, better known as API, is a software intermediary that lets two applications talk to each other. The Murray, Utah-based firm provides a suite of APIs that helps companies like
or Ellie Mae to authenticate and enroll customers. Finicity has raised some $80 million in funding, Crunchbase said. Investors include Experian Ventures, PitchBook said.
The company is similar to Plaid, which
agreed to buy in January for $5.3 billion. Plaid’s APIs help users connect their bank accounts to finance apps and transfer money. The deal has led many to wonder which fintech would get sold next.
Credit Sesame, which had been expected to go public later this year or in 2021, is a smaller version of Credit Karma. Launched in 2010, the Mountain View, Calif., company has been profitable since 2017, the company said. Like Credit Karma, Credit Sesame offers consumers unlimited free access to credit scores, as well as identity theft protection and savings recommendations.
Credit Sesame has raised $120.5 million in funding, according to Crunchbase. That includes a $43 million round in August. Investors include Menlo Ventures, Inventus Capital, Globespan Capital, IA Capital Groups,
Capital One Ventures, and Stanford University.
Some, however, doubted Credit Karma’s interest. “Credit Sesame is just like Credit Karma,” one private equity executive said. “Why would they want two?”
Founded in 2009, NerdWallet aims to help users make better personal financial decisions. This includes picking a credit card, a personal loan or a mortgage. The San Francisco company has raised $105 million in funding through four rounds, Crunchbase said. Investors include IVP, Core Innovation Capital and Camelot Financial Capital Management.
“It’s our company policy not to comment on speculation or rumors related to our business, our solutions or our markets,” Andy Capener, a Finicity spokesman, said in an emailed response to questions.
Credit Sesame and NerdWallet could not be reached for comment.
Write to Luisa Beltran at [email protected]