Intuit Expands Money Management Offerings With Deserve Acquisition

Intuit says it is preparing to acquire mobile-first credit card platform Deserve.

The deal, announced Monday (April 14), will see Intuit acquire “key technology” and team members from Deserve, part of what Intuit says is its strategy to expand its money management offerings.

“This agreement aligns to our strategy to further invest in and expand our money offerings to support our goal of addressing the critical challenges businesses face: managing cash flow and gaining real-time financial visibility,” the company said in a news release. “These challenges are significant, with over 80% of business failures linked to cash flow issues.”

“Select members” of Deserve’s team will join Intuit as part of this acquisition, per the release. Terms of the deal, set to close in the third quarter of the year, have not been disclosed.

Intuit’s comments about the cash flow management challenges facing businesses match PYMNTS Intelligence research that shows roughly half of all small and medium-sized businesses (SMBs) depend on immediate sales or existing cash for survival.

“SMBs with access to some method of financing demonstrate greater confidence in navigating economic challenges,” PYMNTS wrote last month.

“Interestingly, many SMBs not using financing claim that it’s unnecessary, but also lack access. Overall, the report highlights the crucial role of financing in SMB stability and growth while also identifying disparities in access and utilization.”

And with around half of these smaller businesses relying just on cash at hand to remain afloat, that leaves a substantial number SMBs acutely vulnerable, particularly hotels, restaurants and entertainment businesses, the most likely to be dependent on these limited cash stockpiles.

Additional research by PYMNTS Intelligence and American Express finds that limited cash reserves presents an ongoing challenge, with nearly 70% of SMBs holding less than four months’ worth of cash, making them vulnerable to disruptions.

With 90% of their revenue spent on daily operations, many business owners juggle tight cash flow, with 45% having to sacrifice their own paychecks due to cash flow issues and 22% struggling to stay on top essential bills, pushing them toward closure.

“These factors underscore a need for SMBs to evaluate their cash flow strategies,” PYMNTS wrote in January. “In fact, 45% of global CEOs recognize the need to assess their business models to optimize cash flow, and the concern is even greater among smaller firms.”

The research also found that 56% of CEOs from businesses earning less than $100 million are concerned about their long-term viability it their cash management practices remain unchanged.