Credit Karma’s main feature has been allowing users to see their credit score; the company launched a identity monitoring tool last year and is now expanding the data it scans to include the dark web; the tool will now search through 13 billion data breaches, up from 4.5 billion. Source
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Customer acquisition cost is a central tenant to all lenders; in his keynote from LendIt USA 2016, Ken Lin of Credit Karma focused on trends in customer acquisition and ideas on how to improve innovation.
The three main themes he touched on were certainty, transparency and simplicity.
Certainty - 70% to 80% of loan applications are denied, this gives the consumer uncertainty when applying for a loan. Using underwriting to offer a unique loan to the customer can better help them to understand the right loan for them.
Transparency - There are over 6,500 lenders who offer tens of thousands of loan products, this can overload the customer and cloud their understanding. Giving borrowers more insight into their credit profile can help the consumer and force the lenders to differentiate themselves.
Simplicity - On average loan applications still consist of 25 to 50 questions, some can even go up to 100. By making the loan application simpler, consumers will spend less time applying for a loan and have more time to understand and explore the right loan for them.
A few trends and ideas he touched on were the move to mobile loan applications and new innovation in technology. 70% of Credit Karma traffic is driven through mobile and the younger generations use mobile almost 80% of the time. Making sure you give them the proper mobile experience is key.
Additionally, new innovations in technology are helping to drive down costs, including biometric technology such as a fingerprint to help identify who the borrower is and pre populating their information to cut down on loan times.
Check out the full video interview here:
Credit Karma is positioning itself to be more than just a place to check your credit score; the company currently has 80 million customers and currently has advantages in significant scale and the data it houses; they are now looking at using chatbots with their acquisition of “Penny” to further their relationships with their customers. Source
According to the WSJ, Credit Karma isn’t receiving any proceeds or issuing new shares as part of the deal; Silver Lake will instead be purchasing shares from early investors and employees in a secondary sale; the investment values the company around $4 billion; Credit Karma generated $500 million in revenue in 2016 and according to CEO Kenneth Lin they have been growing at a double-digit pace since; Credit Karma last raised money in 2015. Source
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