The rush of funding for fintech startups continues. TechCrunch has learned and confirmed that Credit Karma — a platform that provides credit scores to users but also serves as a portal for people to search and apply for various financial services like loans, credit cards and insurance — has raised a round of funding of $175 million on a valuation of $3.5 billion.
Moreover, from what we understand the company is on track to file for an IPO within the next 1.5 years.
The funding comes from Tiger Global Management, Valinor Management and Viking Global Investors LP, and brings the total raised by Credit Karma to $368.5 million.
The news comes at a flush time for the San Francisco-based company, and for online financial services in general.
The company currently has more than 40 million consumer customers. Originally built as a site for users to keep up and manage their credit scores, it now covers a range of other services, with financial tools and a portal for applying for different kinds of products, from credit cards to insurance and of course loans. Behind the scenes it uses the larger trove of data that it collects to tailor and hone its services for users — but also to provide analytics for the companies that use Credit Karma as a platform to sell services.
“Imagine one financial platform that anticipates and provides everything you need,” said Ken Lin, Credit Karma’s CEO and founder, in a statement. “With more than 40 million members, we are excited by Credit Karma’s widespread adoption by people all over the country, giving us insight into $2.3 trillion of America’s household debt. This massive data enables us to deliver top quality insights for everyone looking to improve their personal finances.”
Going forward it looks like Credit Karma will be using the new funds to expand its platform by offering quicker ways to consolidate loans and more.
“We’re introducing a new level of ease and transparency to personal finance.” said Nikhyl Singhal, Credit Karma’s Chief Product Officer. “Our members will be able to apply for something without filling out endless forms. They’ll also only share the bare minimum of data necessary, yet they’ll have access to a large number of lenders.”
More generally, a wave of tech companies in the financial sector have seen their stars rise in the last couple of years — underscored by a wider acceptance of using the Internet and mobile devices to manage financial services and in general the increased convenience that they bring. That has had a knock on effect for the companies looking to provide financial services online, whether they be payments, money transfers, or buying things like insurance.
Interestingly, to date, Credit Karma has focused all of its efforts on the consumer market and in the U.S. Considering its valuation and the bigger opportunity for financial services, it will be interesting to see how and when it chooses to expand its horizons.