A consumer-facing credit monitoring startup, Credit Karma, is now worth more than a billion dollars following a new round of funding. The company announced this morning it has raised an additional $75 million in growth funding from Google Capital, Tiger Global Management, and Susquehanna Growth Equity. The new round comes 8 months after its Series C – a time when Credit Karma’s user base increased by over 50%.
The WSJ reported the $1 billion+ valuation this morning, and the company confirms it’s accurate.
Credit Karma now has 32 million users, which is up from the 20 million it had in February, when it closed its $85 million C round. To date, Credit Karma has raised more than $193.5 million in outside funding, from investors who also include Ribbit Capital, Felicis Ventures, QED Investors, Founders Fund and SV Angel.
Based in San Francisco, Credit Karma stands out from a number of consumer-facing startups coming out of the Valley for delivering something of practical value to a majority of Americans. Instead of Snapchat and Whatsapp clones or butlers-on-demand, the company’s goal is to help users make sense of their financial standing, including their credit scores and how they’re being perceived by credit bureaus for the actions they’re making whether that’s applying for a loan or simply carrying a too-high balance on a card and more.
Credit Karma’s website and mobile apps explain the sometimes complicated credit scoring system in layman’s terms, letting consumers know when things are going wrong and what they can do to improve their standing. This summer, the company rolled out free credit reports to their users.
Though anyone can retrieve their own credit report for free once per year, or pay a company to pull it for you, many consumers have been sucked in by less-than-scrupulous companies who would offer you a “free” report, but then start charging you monthly for their subscription-based service – terms you apparently agreed to by not reading the fine print.
Credit Karma’s reports, and their insights, alerts and recommendations are actually free, however, as the company’s business model is to sell consumers credit products, which are recommended to you based on your financial history, current standing and needs. It doesn’t sell your data or mysteriously sign you up for things you weren’t aware of, but instead makes transparent suggestions for services, loan vehicles, credit cards and more, and you can choose to purchase or not. (I know this to be true as a long-time user who is not randomly charged for things, but who once opted to research one of their suggestions, agreed it made sense for me, and then signed up.)
The company says the new funding is being used to “further advance its growth initiatives and ongoing product innovation.”