Credit Karma, the personal finance company that provides its members with products and services to manage their finances and connects those members to financial services providers, is officially getting into the mortgage business by acquiring Approved, a digital mortgage platform.
Credit Karma will not be lending though. But the company is expanding into the mortgage business thanks to Approved, which was recently named to HousingWire Magazine’s 2018 HW Tech100 as one of the top tech companies in housing finance.
According to a blog from Approved Founder and CEO Andy Taylor, Approved will help Credit Karma build a “digital mortgage experience” for its 80 million members.
Credit Karma offers its members products that can be used to monitor and improve their credit, prepare and file their income taxes, monitor their identities, and track and manage vehicle information and financing solutions.
Earlier this year, Credit Karma said that it has originated more than $40 billion in credit products through its platform including credit cards, personal loans, mortgages, automotive financing, and student loan refinancing.
Credit Karma made that claim when it announced that Silver Lake, a private equity firm that led a $500 million round of funding online lender SoFi last year, was planning on investing $500 million in the company. That deal valued Credit Karma at $4 billion.
Credit Karma and Approved did not share the financial details of the deal publicly, but Taylor said that being acquired by Credit Karma will allow Approved to significantly grow its business.
“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,” Taylor said in his blog post.
Approved, which was founded just a few years ago, expanded its business earlier this year when it announced a deal with LendingQB, a provider of SaaS loan origination technology solutions, to launch a wholesale lending platform.
According to Taylor, Approved has handled nearly $5 billion in mortgage originations so far and has no plans of slowing down. And now, the company is set to grow even more thanks to the Credit Karma acquisition.
In his blog post, Taylor said that the Approved team is working on something new, but isn’t ready to share it yet: “We can’t wait to reveal what we’re working on next,” he wrote.
“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,” Taylor wrote. “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.”
Both Taylor and Approved’s other co-founder, Navtej Sadhal, are former Redfin employees.
“A big shout out and thank you goes to our engineering team who built this amazing beast, our investors and advisors who believed in us when we were just two guys in a garage, EvoNexus for taking us in from said garage, and of course, our customers, whose attention to detail and home-buyer insight made things shine,” Taylor concluded.