It takes guts to liken yourself to Expedia, the $US13 billion travel recommendation site that gives hotel and flight recommendations.
But that’s exactly what Credit Karma calls itself: The Expedia of financial services.
The site offers free credit scores and personal finance recommendations, ranging from credit cards and mortgage loans to advice on how to improve your financial health.
Since its founding in 2007, Credit Karma has added over 40 million users, becoming one of the most popular financial websites in the US. By March of last year, it was reported to be making well-over $US200 million in sales, with 1.5 million new users joining its site every month.
And on Tuesday, Credit Karma announced that it raised another $US175 million in a Series D round, giving itself a hefty $US3 billion valuation. That’s triple what it was valued at last September, when it raised an $US85 million Series C round.
“Imagine one financial platform that anticipates and provides everything you need,” Credit Karma CEO Ken Lin said in a statement. “We’ll soon be able to let people know when they have an opportunity to save money and if they will be approved, with new levels of certainty.”
For this round, hedge funds Tiger Global Management, Valinor Management and Viking Global Investors LP participated. Credit Karma has raised a total of $US368.5 million to date.
This makes Credit Karma one of the fastest growing startups, and a strong candidate to go public very soon. In fact, earlier this year, Credit Karma hired Joseph Kauffman, a former financial executive of a number of different public companies, as its new CFO, indicating it may be prepping for an IPO.
Credit Karma’s soaring value is also a reflection of the rapid growth in the financial technology sector. A lot of these services make banking cheaper, by reducing headcount and operating cost, fundamentally changing the way people use the bank.
JPMorgan Chase CEO Jamie Dimon, in fact, warned of this trend recently, saying, “Silicon Valley is coming…There are hundreds of startups with a lot of brains and money working on various alternatives to traditional banking.”