Intuit agrees to acquire credit-building startup SeedFi
(Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images)
Intuit has agreed to acquire San Francisco-based financial health startup SeedFi, which it plans to integrate into its Credit Karma division and expand its credit-building capabilities.
Why it matters: Fintech M&A activity might have slowed to a trickle over a turbulent 2022, but acquirers are still opportunistically looking to add products and features to engage with users.
How it works: SeedFi helps low- and no-credit consumers boost their scores and increase their savings at the same time.
- Users decide how much they want to save each month (as little as $20 per month or $10 per paycheck), and SeedFi makes small, interest-free loans to credit builder accounts.
- Users' automated repayments are then reported to credit bureaus, which increases their credit scores.
- Finally, customer funds are put into a locked savings account that can be accessed once its total reaches $500.
Between the lines: With this deal, Intuit is simply bringing the technology and team behind Credit Karma's credit builder offering in-house.
- Intuit Ventures was a strategic investor in SeedFi, and in January Intuit announced a partnership to integrate the startup's automated savings and credit-building product into Credit Karma Money, initially targeting users with credit scores of 620 or below.
- Since its launch, the program has helped users increase their scores by an average of 21 points over as little as 30 to 45 days, according to Poulomi Damany, SVP and GM for Credit Karma Money and Tax.
- "If you're new to credit or really deep subprime — like sub-600 — we've seen upwards of 45 to 60 point [increases]," Damany said.
Of note: Financial terms of the deal were not disclosed.
- In addition to Intuit, SeedFi raised funds from investors that include Andreessen Horowitz, Flourish Ventures, Core Innovation Capital and Quiet Capital, among others.
