Credit Karma gets into digital mortgages with Approved acquisition
Credit Karma is diving into the mortgage industry with a plan to acquire digital mortgage startup Approved, a provider of consumer-facing online point of sale technology.
With this move, the company intends to offer a consumer-facing digital mortgage experience to its customer base, comprised of about 80 million members.
The pending acquisition sheds light on an emerging pattern — online companies with audiences related to the mortgage industry are tapping their resources and large client bases to offer them digital borrowing tools.
Similar to Credit Karma, Zillow transitioned from mortgage marketer to loan originator with its acquisition of Mortgage Lenders of America, in an effort to support its home-flipping business.
Approved's technology has supported nearly $5 billion in mortgage loan originations to date.
"Working with Credit Karma gives us the resources and immediate scale to accelerate our mission-driven work, reaching significantly more homebuyers than we could have imagined when we started. It also doesn't hurt that CK has amassed a team of some of the smartest, most creative and humble people we've ever met," Andy Taylor, Approved founder and CEO, wrote in a company blog.
"Credit Karma shares the same DNA that made us proud to work at Redfin, with unrelenting attention to how technology can improve the financial lives of its members. They're the troublemaker that doesn't care how things 'have always been done'; contrarian, but not combative; and we’re joining them to change how people buy homes," he continued.
Approved left Redfin three years ago to streamline the process for lenders at a time when the industry's tech focus was mainly on the front end, according to the San Francisco-based company.
Tech investor Silver Lake acquired a minority stake in Credit Karma back in March.
"As we planned for the future and our continued growth, we sought a partner that could support our growth trajectory and provide existing investors an opportunity to lock in some of the rewards they've earned for their support and hard work," Ken Lin, Credit Karma CEO and founder, previously said of Silver Lake in a press release.
A price for the acquisition of Approved has not yet been disclosed.