Personal Loans: Credit Karma, Nerd Wallet
The requested information about the personal loan companies Credit Karma and Nerd Wallet and how they compare against each other is presented below and in the attached spreadsheet.
- Credit Karma is a U.S. multinational personal finance company, headquartered in San Francisco. It was founded in 2007 by Kenneth Lin, Ryan Graciano, and Nichole Mustard.
- Credit Karma was valued as a $4 billion company in 2018.
- The company provides credit cards, free credit score, personal loans, home loans, auto loans, auto refinancing and insurance services, and tax filing on their website and apps to their customers.
- Since Credit Karma is a free website, it does not charge anything from its customers. However, when a customer takes a personal loan from a lending agency as per Credit Karma's advice, Credit Karma gets a commission from the said lender.
- Since their founding in 2007, Credit Karma has received a lot of financial backing and funding from their investors. They have made a lot of acquisitions from 2015 to 2018 and expanded their business to the U.K. They also have launched Credit Karma Savings and Credit Karma Tax in the U.S.
- Nerd Wallet is a U.S. personal finance company, headquartered in San Francisco. It was founded in 2009 by Tim Chen and Jacob Gibson.
- Nerd Wallet was valued as a more than $500 million company in 2018. The exact figures are however not available in the public domain.
- The company provides credit cards, free credit score, mortgages, savings account, online brokering, and personal loans on their website and apps to their customers.
- Since Nerd Wallet is a free website, it does not charge anything from its customers. However, when a customer takes a personal loan from a lending agency as per Nerd Wallet's advice, Nerd Wallet gets a commission from the said lender.
- Since their founding in 2009, they have only received a total funding of $69 million from their investors. Consequently, they have not been able to make a lot of acquisitions and moves in the personal finance market. Also, they had been hit hard by the worldwide economic slowdown, hence they had to release 40 employees in 2017 in which was also their VP of Growth Henry Hsu.
For our research, we conducted an extensive search of both Credit Karma and Nerd Wallet's websites, news articles, public interviews, external market reports for any information related to their personal loan sector and overall expansion plans and upcoming strategic initiatives. For both Credit Karma and Nerd Wallet, there is not much public information about their personal loan sector. Both these websites are free and provide free credit scores and recommendations for personal loans to their users who then decide which lending company to borrow from. For their service, both these companies receive an undisclosed commission from the lending agency from which the customer has borrowed their personal loan. Since the personal loan transaction is essentially being done by the third-party lending agency and both Credit Karma and Nerd Wallet play the role of brokers, they do not share a lot of data regarding personal loans on their websites and in the public domain. Hence, we expanded our search outwards to cover their overall personal financing business in general.
While we could find a lot of public information about the expansion plans, upcoming strategic initiatives, and the development of technology of Credit Wallet, which has risen to become one of the major firms in the personal finance industry, we could not find much corresponding public information about Nerd Wallet. The first major reason for this is that Nerd Wallet has not been able to get a lot of funding from their investors, unlike their competitor Credit Karma. Secondly, the global economic slowdown has hit them hard resulting in a lot of layoffs and their not venturing out of the U.S. market. This has made the company conservative in their expansion activities and guarded in their approach. However, we have presented the available information in the research as well as in the attached spreadsheet.