Credit Karma, the online credit score provider, has agreed to sell a $500 million stake from existing shareholders to Silver Lake Partners. The so-called secondary offering of common shares values the company at $4 billion and will be open to employees, according to a person familiar with the situation. In 2015, Credit Karma fetched a $3.5 billion valuation on its sale of $175 million preferred shares to hedge funds, including Tiger Global Management. Preferred shares normally carry a premium of more than 15%.
Credit Karma CEO Kenneth Lin told The Information the company is profitable and that revenue growth has been in the double digits; revenue totaled $500 million in 2016. He didn’t rule out taking the 11-year-old company public in the future. “We study our options every quarter,” said Mr. Lin. He said he plans to grow the company by expanding internationally and offering more products. In 2016, Credit Karma launched in Canada where, he said, it became a market leader in 2017, “proving the model works outside of the U.S.” Last year it launched its tax filing software in the U.S. The company will keep expanding its financial services offerings, including lending and insurance through partnerships, he said.