As we know, Credit Karma drove 49% of UPST’s loan originations for the six months ended June 30, 2021.
INTU owns credit karma. I listened to their earnings call today.
Credit Karma had revenue of $405 million, a quarterly record for the business.
For the full year, from the addition of Credit Karma beginning December 3 2020, Intuit reported Credit Karma revenue of $865 million.
FY21: Q2 144$, Q3 316$, Q4 405$
I’m certain UPST and the improving macro credit trends helped contribute to CK’s significant sequential revenue growth
“Both the core verticals - including credit cards and personal loans, and growth verticals - including home and auto loans and insurance, saw record high revenue in the quarter.
Sequential growth from third quarter to fourth quarter predominantly reflects strength in credit cards and personal loans, as transactions per member increased.”
INTU expects the following segment revenue result for fiscal year 2022 regarding Credit Karma: revenue of $1.345 billion to $1.380 billion.
Interesting, this looks like they are guiding for tapering of growth in Credit Karma for the next year.
An analyst asked specifically about their visibility for Credit karma for the next year. They answered that they have over 100 million customers with growing monthly active users. With use of Lightbox to see customer spend behavior/activity, they can better offer the right products to them.
(Lightbox is a platform that enables partners to build and deploy targeting models in Credit Karma’s Model Building Environment. This provides partners with the ability to make real time, customized, pre-approved credit card or personal loan offers to members upon login.)
They specifically said "We remain very engaged with Credit Karma’s partners…We are intentionally a very agnostic platform"
I think it’s clear that the risk of INTU deciding to compete against UPST by coming up with their own loan underwriting models remains very low. Doing so would also be a huge hit to their credibility. They’re very much entrenched in the current partnering business model.
As a side, they also mentioned their penetration of credit cards/personal loans is highest among credit karma members, but auto remains the lowest.
From a Jan 2021 presentation they did cite data showing a huge opportunity in auto refinance given the massive APR dispersion among people with identical credit scores (
https://s23.q4cdn.com/935127502/files/doc_presentations/2021… slide 10)
Interestingly, Upstart is still not listed as part of their auto refinance offers according to this page https://www.creditkarma.com/shop/autos/index/type/refinance
I wonder if UPST is still negotiating a partner deal with Credit Karma or perhaps UPST believes it’s not worth paying to market themselves on the platform, given the very low uptake in auto among Credit Karma members.