Intuit should have recorded a $170m transaction in its Quicken personal finance software on Monday after buying online rival Mint.com.
That’s a healthy return for investors in the two-year-old Silicon Valley start-up, which raised $32m over three VC rounds. Intuit had introduced Quicken Online to compete with Mint, and had closed in on its rival with 1.4m online users to Mint’s 1.5m.
So why did it feel the need to acquire Mint? – one of several questions answered by Dan Maurer, head of Intuit’s consumer group, and Aaron Patzer, chief executive and founder of Mint, in an FT interview after the jump.
Dan Maurer: “The competitive landscape in personal finance is enormous. There are 80m online banking customers. Both Mint and Quicken Online have a relatively small percentage of that so there’s huge potential in this space.
“What we really liked about Mint is the innovative technology that they’ve brought to not only keep track of your finances, but to make and save you money. That’s something that Quicken Online had not accomplished yet, we think it’s a big customer win to have it.
“Not only can we apply that to Quicken Online but we can apply it to the 10-12m Quicken desktop [program] customers and we can also apply it to the online banking division and eventually even to Quickbooks customers.”
Aaron Patzer: “The recommendations [for switching to other financial products] we give are all personal, so the credit card you see is different from what I see -because I spend a lot on travel it recommends an air miles card, while maybe you have a balance on your card so it gives you one with a better balance transfer rate. Our service is free but we are able to monetise our users by saving them money. We save them 100s or 1,000s of dollars by showing them better interest rates and prices, an advertiser gets a new client and Mint makes a sales commission.
“So what’s really powerful for Intuit is you can apply that same savings engine to Quicken desktop’s 12m users as a new revenue strream for Intuit, you can apply it to Quickbooks users, because small businesses need money savings on not just financial products but the things that they buy most, whether it’s printing or advertising services.”
But why sell now when you are doing very well in this category?
Aaron Patzer: “Dan runs Turbotax which has 20-24m returns done in a given year and there are 10-12m users of Quicken, 6m small business users use Quickbooks, there are 8m people who use online banking platforms powered by Intuit and these banks have the potential for 36m. So instead of dealing with a couple of million people we can leapfrog here to three years in the future and bring those innovations and savings to 10s of millions of people. It’s scale not just in the US, but also it’s tough to go international with this stuff and Intuit has the reach to do that.
“Beyond that, we’re really excited to just build more into the product. Mint doesn’t let you pay your bills or pay your credit card off, you ought to be able to do that right in one place. Their Digital Insight platform services 1,800 banks and credit unions so they have got the transactional capability to do exactly that and then Mint becomes powerful as a great cross-sell platform for those banks – they will say to the user – ‘We have a mortgage rate better than the one you currently have, or a CD that’s better than your current CD. ‘
“With Quicken desktop, we will be able to take all of our categorisation technology, which is 93-94 per cent accurate and Quicken out of the box is only about 50 per cent accurate. Expect the savings engine to also migrate into Quicken desktop, while Mint has a lot of improvement to do itself on the investment side and that’s a place where we can take a cue from Quicken desktop.
Is Mint’s local data on where consumers are spending their money useful to Intuit?
Aaron Patzer: “We’re not selling any personal user data , these are spending indexes for a particular city or state, what’s going up, what’s going down are people buying more at Starbucks or are they spending more on restaurants or groceries this month.
“You can apply that same kind of aggregate statistic to small businesses, one thing we’ve been very successful with at a consumer level recently is we put out an offer saying: ‘Hey, you spend 79 per cent more than the average user on auto insurance, maybe it’s time to get a new quote,” and the same thing is applicable to small businesses. For paper supply companies with 5-10 employees, we can say they spend on average this much on printing and you spend 300 per cent more, here are some vendors who could really reduce that cost.”
