(Bloomberg) -- Credit Karma Inc., one of top 10 most valuable financial technology startups, missed its 2017 revenue goal by 14 percent, according to an internal presentation.
The San Francisco-based company, which offers personal finance tools such as credit monitoring and tax preparation, had an internal goal for 2017 revenue of $790 million, but fell short of that by $108 million, the document shows. Its revenue largely comes from the fees it charges credit-card companies and other lenders for connecting them to its customers. The service is free for consumers.
Despite falling short of its target, revenue still rose about 37 percent in 2017. Chief Executive Officer Kenneth Lin said the goal the company had shared with investors was $700 million, which it only missed by 3 percent, and that the internal presentation seen by Bloomberg was a “stretch figure.” Lin said he expects revenue to keep growing.
“Our forecast still shows strong double-digit growth,” Lin said.
Revenue per transaction was also slightly lower than the company expected, the presentation shows. Lin said margins vary from partner to partner, but he is confident the company will continue to generate strong returns. The startup has been profitable since 2015, according to a person familiar with the company.
Credit Karma says it now has more than 80 million users in the U.S. and Canada, and the document shows that the number of those users returning each month was higher than projected. Lin attributes this to not only the new product lines it launched last year, such as a free tax preparation service, but to trust in his firm.
“We see a boost in engagement and new signups each time there is a data breach somewhere else,” he said.
Founded in 2007, Credit Karma was originally a free credit score platform but has since branched into new offerings such as helping people find personal loans, credit cards and even auto insurance. Following the Equifax Inc. data breach last year, the startup also launched a free credit-monitoring service.
Last month, buyout firm Silver Lake bought about a $500 million stake in Credit Karma, valuing it at almost $4 billion, according to people familiar with the investment. Prior to that, Credit Karma raised funding from Tiger Global Management, Founders Fund, SV Angel and others.
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