February 24, 2020, is a day Ken Lin will never forget. The Credit Karma CEO was about to announce that the company he founded 13 years earlier was about to be acquired for more than $7 billion. Meanwhile, the stock market was in free fall.
“I remember waking up and the Dow futures were down something like 600 points because the COVID pieces were starting to hit the market,” Lin said. “I’m up at 5 o’clock in the morning, the Dow is flashing red … and we’re all like, ‘Are we going to do this?’”
“What had been a very profitable business for a very long time is all of a sudden very unprofitable, because you can’t pivot on a dime. We had a lot of decisions to make.” Ken Lin, Credit Karma CEO
Markets were getting jittery as it became clear the coronavirus had spread beyond China’s borders as case numbers were multiplying in Italy and South Korea. The S&P 500 fell 3.5% that day and kicked off a weeklong sell-off in global securities as the WHO warned COVID-19 could soon become a global pandemic.
“Needless to say, we all agreed that it was the right decision [to move forward] and that all the externalities and unknowns at that point were immaterial,” Lin said. “So we pushed forward with it and we got the deal signed and announced.”
By the time the deal closed — on December 3, one year ago — Credit Karma had seen its business impacted by a tightening of the credit markets and had been forced to divest its tax business after a Justice Department review.
But in the 12 months since, Credit Karma, which operates as a mostly independent unit within Intuit, has seen a dramatic rebound in its business thanks in part to a reversal in the financial markets, but also due to commercial adoption of its Lightbox decision-making engine and acceleration of consumer interest from integrations with Intuit products.