Credit Karma Buys Out UK FinTech Company Noddle

The American FinTech Credit Karma just entered the British market through purchasing Noddle, a TransUnion-owned start-up focusing on credit scoring. This buyout stresses their intent to reach out beyond just the US market. More acquisitions could follow.

The financial terms of this operation haven’t been made public but Credit Karma lifted the veil off some related plans. Their offer will first be integrated with Noddle’s service to aim for 4 million customers in the UK. They will then be able to apply for car loans, mortgages and credit cards as well as debt consolidation services from Noddle’s platform.

Also, some products crafted by Noddle will be added to Credit Karma’s range of services in the US: for instance, their identity monitoring option to reduce the potential impact of security breaches (as highlighted by the Equifax case).

Furthermore, Noddle’s entire set of offers will be proposed for free to match Credit Karma’s existing way of dealing with customer-facing products. As a business finder, their business model only relies on charging fees to their partners.

Comments – Reaching out for external growth

TransUnion already partnered with Credit Karma as this credit bureau provided them with the data to analyse and assess their customers’ credit scores. This agreement will not be affected by Noddle’s buyout.

Credit Karma lands in Europe and claims they consider other acquisitions to aim for other markets, too. As a matter of fact, given their size, they can now afford to reach out beyond just the US borders. Following a $500 million funding round in 2018, Credit Karma came to be valued at more than $4 billion. They already closed several acquisition procedures: the American Fintech Approved, for instance, allowed them to enter the mortgage lending market.

Credit Karma started focusing on their diversification strategy several months ago to add more products to their core set of offers, i.e.: provide their customers with credit scoring services. They first added a PFM feature highlighting all sorts of financial products and they acquired the PFM specialist Penny. Then, they paid attention to the car industry and even made room for their smart assistant to this respect.

Some of the largest FinTechs have now reached critical mass which allows them to pursue acquisition-based development strategies. This is especially true in this instance.