Cash Flow: Credit Karma Pulls Down Another $175 M

[Updated 6/24/15, 9:40 am. See below.] San Francisco-based Credit Karma, an online personal finance site that raised $75 million in September, followed up with a $175 million Series D financing round announced today.

Observers had valued the company at about $1 billion after the September round, but are now estimating Credit Karma’s worth at $3 billion or more.

The pace of Credit Karma’s fundraising is another symptom of heated investor interest in financial technology, including online sites that help consumers spend and invest their money more wisely while providing a marketplace for lenders. Another San Francisco personal finance site, NerdWallet, raised $64 million in a Series A round announced in May.

The escalating capital infusions are also driving a duel for members. Credit Karma, founded in 2007, says it has more than 40 million members who have signed up through its website or mobile app, and 114 million unique visitors. NerdWallet, founded in 2009, says 30 million consumers have been drawn to its site. [Phrase added about Credit Karma’s unique visitors.]

When crowds of consumers enter their financial profiles, it adds up to big data, and Credit Karma says it plans to use its data resources and its growing cash trove to develop new services.

“We want to be a strong advocate for our members,” Credit Karma CEO and founder Ken Lin said in a statement about the Series D. “Today, no one tells you when your credit rating goes up or when a lower interest rate is available for your loan.”

The company, which started out by offering free credit scores to users, is now aiming to be a comprehensive financial marketplace where consumers can compare insurance quotes, consolidate student loans, find the best credit card, file all the information needed in loan applications, and share the information only with lenders likely to approve the loan. The service works online and through its mobile apps.

Existing investor Tiger Global Management and new investors Valinor Management and Viking Global Investors participated in the Series D round, which brings Credit Karma’s equity fundraising total to $368.5 million.

Bernadette Tansey is Xconomy's San Francisco Editor. You can reach her at btansey@xconomy.com. Follow @Tansey_Xconomy

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