Credit Karma, a fintech company founded in 2007, was recently acquired by Intuit, a 1980s-established financial software company. One of the pioneers in the modern world of online personal finance, Credit Karma offers an array of consumer financial services, including credit scores, loans and mortgages. Intuit, on the other hand, is famous for tax software like TurboTax and QuickBooks.
At the time Credit Karma announced that it had agreed to be acquired by Intuit, the personal finance company already enjoyed massive popularity and had more than 110 million members, while Intuit had close to 57 million. The deal was finalized in December 2020 at $8.1 billion including cash and stock. Credit Karma’s tax arm was acquired by Square ahead of the merger to avoid antitrust concerns.
But many insiders announced doubts when the possibility of the deal was floated in February 2020. The pandemic was rearing its ugly head and the market was rife with uncertainty. Several big mergers during this period had not come to fruition and many aspersions were cast on the viaibility of a Credit Karma-Intuit deal.
The challenge for Credit Karma CEO Ken Lin
As is the case with many acquisitions nowadays, Credit Karma has remained an independent entity. Credit Karma and Intuit have publicly avowed that they seek to accelerate their growth by combining their powers. But this arrangement has not been without challenges for Credit Karma CEO Ken Lin.
In an interview with publisher Protocol, Lin revealed that among the biggest changes he has faced since the merger is grappling with a different definition of a “boss." While he previously answered monthly to members of Credit Karma's board, now he reports biweekly to Intuit CEO Sasan Goodarzi.
Before deciding to sell, advisers for Lin told him to make the decision that was best for him and the company’s stakeholders, but he continued to have private doubts due to the uncertainties unfolding from the pandemic.
But that changed when Goodarzi reached out to Lin and made an unwavering commitment that Intuit would never back out.
Autonomy versus absorption
Lin said he agreed to the acquisition based solely on the agreed-upon model of continued autonomy and acceleration for Credit Karma rather than on absorption. Times have changed, and acquisitions are increasingly about growth and keeping companies running at an even faster rate, said Lin, citing examples such as GitHub, Microsoft and LinkedIn.
LinkedIn Executive Chairman and Intuit board member Jeff Weiner frequently offered advice to Linn throughout the merger based on his experience with the social network's merger with Microsoft.
The importance of "no"
According to Lin, one of the most valuable pieces of advice offered by Weiner is that collaborating and consolidating two companies can be like "death by a thousand cuts" as the team gets bogged down by endless integrations. And to break that paradigm, Lin would have to be prepared to say no when needed.
Lin should keep the greater interests of Credit Karma in his heart and avoid viewing the merger as a popularity contest with people on the Intuit side, and he should be prepared to push back when needed, Weiner advised. Lin, who describes himself as a mediator and peacemaker, found the insight invaluable throughout the process.
Now that Credit Karma is a part of Intuit and the two are aligned in their business ideals, Lin has only one thought on his mind: acceleration.