December 31, 2015
Credit Karma, a credit-monitoring site that provides free credit scores, today has made its first acquisition. The company has acquired a mobile notifications app maker Snowball, as reported by TC. With this acquisition, Credit Karma plans to expand the team's expertise in the mobile notifications space. Designed for Android, Snowball will be pulled out of Google Play in the nearest future.
According to TC, five members of Snowball’s team of six will join Credit Karma, including CEO Anish Acharya, who will become Credit Karma’s Senior Director of Product Management. Unfortunately, in three months after Snowball app removal from the Google Play store, the app will be shut down and all data will be deleted. Credit Karma, probably, just made one of the most expensive team hires, since it is not even planning to use Snowball`s IP at all.
Founded in April 2014, Snowball was the second venture of Anish Acharya and Jeson Patel, who previously also founded a mobile social games publisher SocialDeck and successfully sold it to Google in 2010. Anish and Jeson believed that notifications represent the next important platform, as Anish shared in the company's blog. App engagement is increasingly defined by push-driven notifications rather than the traditional pull-driven experience, which has led to a notification overload problem. In the end, it prevents consumers from realizing the benefits of relevant, useful notifications. That is why Snowball v2 was launched - to upgrade the notifications experience for Android users. Snowball streamlines notification channels on users’ devices. Moreover, the app is a self-learning machine that remembers users’ preferences so that each next set of notifications will take into account their previous actions.
Although the app building process was technically challenging, as the team had to figure out how to take over the entire pull-down notifications interface on Android, as well as the full notification swipe itself, the app achieved far fewer downloads than expected - 250,000.
Regardless of market ‘success’, it’s the expertise that Credit Karma is now interested in bringing onto its team as it rolls out further enhancements to its own set of mobile applications in the near future, as Credit Karma CTO Ryan Graciano shared with TC.
Graciano also added, We’re seeing a huge movement of consumers toward mobile, particularly in younger demographics. Android is a key platform for us. And these guys have really amazing experience on Android, in particular.
Credit Karma is interested in the Android app for two important reasons. Firstly, many of Credit Karma’s over 45 million total users access the service on mobile devices. And secondly, of those users accessing the service on mobile devices, there is a prevalence of lower to middle credit bands, which is a group that tends to skew more toward Android.
Graciano also shared that the Snowball team was particularly interesting for Credit Karma due to its ability to convert mobile notifications into something actionable – which ties into Credit Karma’s larger plans for mobile. We have tens of thousands of data points on a particular customer at any time, so there’s this constant inflow of things we could be telling you. But sorting through all that…is a very tricky thing to do – especially in a way where you’re not overwhelming the user with spurious notifications, he added.
Snowball`s CEO Anish Acharya commented on the relationships with the acquirer’s team, For the Snowball team, it was all about the people and mission. We had a great existing relationship with ex-Googler and Credit Karma CPO Nikhyl Singhal, and as we got to know Ryan and the rest of the leadership team, we were blown away by their caliber, culture and the commitment to the mission.
As we learned more about the company’s focus on improving people’s financial health at scale, it became apparent this opportunity was a unique combination of meaningful mission, significant scale and a mobile-first product focus. It is the most interesting problem, with the most interesting people, for us to solve next, he continued.
Quite different in size and financial stability, Snowball and Credit Karma, can certainly leverage one another's’ expertise and resources. Snowball had previously raised a $2.3 million seed round from Felicis Ventures, Golden Venture Partners, Google Ventures, Metamorphic Ventures, and Wesley Chan. Credit Karma, on the other hand, is one of the FinTech ‘unicorns’. The company recently raised $175 million in Series D funding round, bringing its valuation to $3.5 billion. With its service, Credit Karma taps into $2.3 trillion of America’s household debt information. Credit Karma was listed among the top FinTech companies in the US in 2015.