QED Investors, an active venture capital firm that has backed many Fintechs, booked a big win this week it seems. Ten years ago, QED was the Series A lead investor in Credit Karma. Following the news this week that Intuit has purchased Credit Karma for $7.1 billion it appears the bet has paid off.
Calling the investment an “incredible journey,” QED provided some insight into the investment:
“… for kicks and giggles I pulled out our investment memo and the company’s 2009 financials. Reviewing them definitely made me grin. The company was so small and so thinly capitalized that payroll + professional fees were running around $33K a month and the entire cost base added up to a crazy monthly figure of $77K. Our thesis for investing was well-grounded, we understood the risks of investing in the company at a time when their sources of revenue were fighting bigger battles (i.e. – capital adequacy, regulatory oversight, good/bad bank splits, etc.), and we had done enough work to fall completely in love with the team and the mission of the company. Fortunately, they fell in love with us as well…and thus began our journey together. The company is now generating north of $1B a year in revenue and has signed up over 100MM members over the past decade. What a crazy ride!”
QED aptly noted that their patience paid off and that durable companies aren’t built overnight. Venture capital and backing early-stage companies is not something for the risk-averse nor those in a rush to make money.
On another note, QED has just closed on an over-subscribed $350 million fund for QED Fund VI. The Credit Karma win may have helped.