Skip to main content

Silver Lake is buying a $500M stake in Credit Karma in a massive secondary round

Credit Karma, which once started as a simple credit report system and is now looking to expand into a true financial assistant, announced today it is getting a massive $500 million secondary investment from Silver Lake.

As part of the investment, Credit Karma says it is getting a 23% bump in the valuation from its last secondary round, which was around $3.25 billion. That means the company is now going to be worth roughly $4 billion altogether, while founder and CEO Kenneth Lin will remain the company’s largest shareholder. That, in the end, is likely important for investors and early employees even as they look to get some liquidity as many look to these founders to ensure that they intend to see the company all the way to the end. Silver Lake’s Mike Bingle is joining the company’s board of directors as part of this deal.

As companies stay private longer, those early employees that spend years at a startup before it hits that huge exit may have to wait longer for some kind of payout for their work. Investors, too, face the same dilemma, especially as the early bets are often just taken on a founder and an idea. And compensation packages early on also typically include equity as a significant portion as companies try to use the financing they raise for growth or other purposes. That makes these kinds of secondary rounds important as it shortens the window for at least some liquidation, which could help employees and investors be a little more patient.

Silver Lake is buying common stock in the company, which is now more than a decade old. But it does mean, with some kind of liquidation for shareholders, that it can likely hold off on an IPO for a little longer. It’s still building out it’s cachet as a financial advisory tool, so it may be that they sought to stay private and not be beholden to the quarterly pressures of a public company while they continue to build out that suite of tools.

Credit Karma is increasingly trying to build a suite of tools that will help it expand just beyond a simple credit score notifier. Late last year, Credit Karma rolled out a tool to be the hub for handling everything related to your cars. All of this sums up to its goal to be a financial assistant, and not just a credit report.



from Startups – TechCrunch https://ift.tt/2J3Y19O
Labels:

Comments

Post a Comment

Popular posts from this blog

Axeleo Capital raises $51 million fund

Axeleo Capital has raised a $51 million fund (€45 million). Axeleo first started with an accelerator focused on enterprise startups. The firm is now all grown up with an acceleration program and a full-fledged VC fund. The accelerator is now called Axeleo Scale , while the fund is called Axeleo Capital . And it’s important to mention both parts of the business as they work hand in hand. Axeleo picks up around 10 startups per year and help them reach the Series A stage. If they’re doing well over the 12 to 18 months of the program, Axeleo funds those startups using its VC fund. Limited partners behind the company’s first fund include Bpifrance through the French Tech Accélération program, the Auvergne-Rhône-Alpes region, Vinci Energies, Crédit Agricole, BNP Paribas, Caisse d’Épargne Rhône-Alpes as well as various business angels and family offices. The firm is also partnering with Hi Inov, the holding company of the Dentressangle family. Axeleo will take care of the early stage in...
Post a Comment
Read more

TikTok’s rivals in India struggle to cash in on its ban

For years, India has served as the largest open battleground for Silicon Valley and Chinese firms searching for their next billion users. With more than 400 million WhatsApp users , India is already the largest market for the Facebook-owned service. The social juggernaut’s big blue app also reaches more than 300 million users in the country. Google is estimated to reach just as many users in India, with YouTube closely rivaling WhatsApp for the most popular smartphone app in the country. Several major giants from China, like Alibaba and Tencent (which a decade ago shut doors for most foreign firms), also count India as their largest overseas market. At its peak, Alibaba’s UC Web gave Google’s Chrome a run for its money. And then there is TikTok, which also identified India as its biggest market outside of China . Though the aggressive arrival of foreign firms in India helped accelerate the growth of the local ecosystem, their capital and expertise also created a level of competit...
Post a Comment
Read more