As Credit Karma seeks to move beyond credit reports and become a financial assistant, the company said on Wednesday (March 28) that Silver Lake bought equity in the company. The fund invested $500 million in Credit Karma, which has been around for more than a decade, TechCrunch reported.
With the investment, Credit Karma’s valuation rises from around $3.25 billion to approximately $4 billion. As part of the deal, Silver Lake’s Mike Bingle will join Credit Karma’s board of directors. But Credit Karma’s founder and CEO, Kenneth Lin, will still be the largest shareholder in the company.
As a result of the deal, Credit Karma will gain some liquidity for shareholders. Also, it might be able to put off an initial public offering (IPO) and grow its product line without having to deal with the downsides of having a public company, according to TechCrunch.
The news comes a little more than a year after Credit Karma became the latest company hoping to offer its online services to the masses of tax filers who prefer internet filing to using accountants. Prior to the release of Credit Karma Tax in December of 2016, Credit Karma acquired a tax software firm. Just two months after announcing the service, Credit Karma already had 1.7 million people lined up to use it.
To help differentiate itself from the other online tax filing services, Credit Karma upped the ante with data collection and analysis. Through the collection of tax payers’ income and other details entered in the tax filing process, Credit Karma Tax sought to recommend credit cards and financial products.
Beyond tax preparation, Credit Karma launched free ID monitoring in 2017 after the Equifax data breach. With the new free service, the credit monitoring company said it could alert its customers as soon as possible if they have been affected by a data breach or if there was suspicious activity on their accounts.