wow. what really impresses me is mint isn't an engineering company - they're a marketing company that put some ajax on top of yodlee. yodlee's been around for over 10 years and they never built a brand or a community like mint.
mint is now #1 on my 'notes to self' when i get so focused on engineering my way to a solution i forget sometimes its' better to partner with a competitor and move on.
they outsourced the hard stuff (scraping/banking relationships) and then focused on building a product. nice work, brilliant execution.
I had no idea that Mint was a layer on top of another product. Can you explain this in greater detail? What is Yodlee? (I realize I'm proving your point by asking!) And what is the nature of Mint/Yodlee's relationship?
Yodlee is the service that took on the painful and expensive problem of actually building an engine that can securely store bank and brokerage passwords and use them to scrape hundreds of different financial sites.
They have a consumer front end. It's quite decent, actually, and it's free. Go to Yodlee.com and sign up. But they apparently make most of their money by (a) licensing their back end to services like Mint, and (b) serving as a kind of OEM for banks, who put up Yodlee's software rebranded as a part of the bank's website.
I have used Yodlee.com directly (and free) for two years; it has functioned extraordinarily well, and is invaluable--it saves hours of time dealing with personal finances, and provides very usable reports. I avoided Mint because I thought that Mint's very thin layer over Yodlee's services was apt to be an unstable business, and now we see that Mint users have been tossed to Intuit. I was also reluctant to expose all my financial details to Mint unnecessarily. Yodlee's own security credentials are high--good enough to convince just about all the large banks, brokerage houses, and credit issuers to trust them. Try a Yodlee account yourself, and you will see that Mint has been adding relatively little distinctive value over Yodlee's unique base.
That to me sounds like a better model than Mint. Sure Yodlee doesn't have the media buzz or "explosive" growth (Mint's growth didn't really impress me either.), but the infrastructure is extremely useful and will be around for a long time.
If Mint is doing well, Yodlee is too. If Mint fails, Yodless will still have a diverse client base to support its business.
But we don't know that Yodlee isn't doing 170M revenues a year either. Getting aquired and making money don't necessarily equate to each other in the most obvious ways.
Youtube was a huge money sink, and got a huge acquisition. Mint is, I believe at least, somewhat profitable, and only got $170M. The timing had a lot more to do with it than anything, but as a consumer, I'm a LOT more likely to give money to Mint than Youtube, and the YouTube founders are arguably a lot richer than the Mint founders.
So is this yet another reason to keep your web app basically free for the masses..?
$170 million in 2 years seems like reason enough for me.. but as Inaka points out: their execution was brilliant. So if you do have a brilliant app maybe you should keep it free.
Unlike most other webapps mint has a very lucrative revenue stream. They're able to offer you alternative financial services targeted towards you based on the information they have about your current financial products. I'm sure the financial companies offering their products on mint pay more than your average ad or click through.Most webapps don't have this sort of opportunity.
"Unlike most other webapps mint has a very lucrative revenue stream"
People keep saying this as if it were fact, but never provide evidence. From what I've seen, Mint has a great potential for revenue. I've not seen any public statements about their financials.
For a privately held entity, how exactly would you like a 3rd party to provide evidence? You have to either know someone on the inside or work by proxy. Assuming you don't know someone, your best proxy is the 10x valuation jump. The $145million valuation wouldn't come without proof of the revenue model to an unproven team.
They were executing revenue, and executing very well.
"For a privately held entity, how exactly would you like a 3rd party to provide evidence?"
If I knew how to answer that question, then we wouldn't be having this little debate. Fortunately, I'm not the one making claims about their profitability.
"They were executing revenue, and executing very well."
I'm sure the financial companies offering their products on mint pay more than your average ad or click through
You're right about that...these banks and credit card companies probably pay hundreds per lead, which is a drop in the bucket compared to how much they'll get over the life of the customer.
" just don't see Intuit as the right company to run Mint"
It isn't. But (due disclosure: I worked at Intuit once and while I have no special knowledge about this deal, I know how Intuit works)
Intuit had no choice really. Mint was high on management's radar and they were always scared of it. Intuit doesn't "get" the web, the whole company is structured around its success on the desktop and there are too many layers of management to make any kind of innovation successful (One on team I saw, there were 22 managers and 3 developers! I kid you not!).
Intuit talks a lot about "innovation", but the fact is that Mint (and FreshBooks) have been chipping away marketshare every quarter and they couldn't build a mint clone/mint killer (they tried a few times).
Intuit has no choice but to acquire mint if they wanted to have a solid web offering. Will they run it into the ground? certainly, over time, as soon as the mint devs vest and leave and the regular Intuit folks take over. Of course this leaves the space open for another competitor!
Congratulations to the mint team! The one thing Intuit has in plenty (for now ;-)) is money! Enjoy!
EDIT: If I were Intuit and I wanted to make this work, I'd keep the Mint.com team around and let them work in their own fashion, outside the regular Intuit corporate structure. Knowing Intuit this will never happen.
The part I don't get is why Mint would take the quick exit rather than fight the fight. It looked to me like they were well positioned for a long term victory.
I hope they do manage to pull something out of this. At $31M invested, a $170M sale could end up getting sopped up by investors. Anyway, congrats to them and I hope it works out.
They just raised $14m at 140; unless they're being done over on liquidation prefs - and who knows, but on a succession of up rounds, doesn't seem that likely - they should be doing pretty well!
Crushing your enemy, seeing them driven before you and hearing the lamentations of their women is victory (e.g. Larry Ellison). $170 million is retirement.
"Crushing your enemy, seeing them driven before you and hearing the lamentations of their women is victory"
While some management "self help" books use war as a metaphor for business, business isn't really war. The Genghis Khan quote you used might be appropriate for a medieval era barbarian general, not so much a businessman in the 21st century.
"Victory" for a startup is meetings its founders'/investors' goals. No more no less.
You say that, but I remember going to Oracle sales conferences in the 90s with lasers, employees lined up wearing black uniforms, Vanessa Mae playing her electric violin and a VP on stage ranting about bringing Oracle's rivals to their knees while the crowd cheered and punched the air.
I'm sure it's a thrill to crush an enemy, but I think I'd rather take a few million and have some women console my "loss." Lamenting women just doesn't do it for me.
The reason is that Mint was created for an exit like this. They had no clear business model other than getting as many users as possible in order to scare Intuit. They have a great product, but I see no plan to make money with it.
Of course they have the thing of suggesting credit cards to users, but it doesn't seem that they were making any money on that...
In summary, if Mint was profitable, they wouldn't sell the company in the first opportunity.
Mint made referral fees on every offer they made "You can make 3% more a year by switching to ING Direct, etc". They made plenty of money, and all they needed was scale (which they proved they could do). The brilliance was that the offers were aligned with the user's wants/desires/needs and were super well qualified so Mint could charge more per referral.
They weren't created to flip - it was a solid business.
Hogwash. They were in a unique position to give trusted credit card reviews to their members, and collect the affiliate fees. Just because a site doesn't have ads or offer a premium subscription doesn't mean it has no business model.
If they had powerful enough investors it may not even have been their choice. Not saying it's the case, it probably isn't, but it's not impossible either.
Wesabe is not a good competitor IMO. When it first released it had a lot of promise (philosophy of data freedom, etc). Unfortunately that's pretty much completely been lost, which I guess to some extent because some of it was too hard to be realistically accomplished with limited resources and time (pulling your account data with software controlled by you rather than giving Wesabe your account password).
The core app itself has gotten continually worse. The "v2" that launched some months ago now was less usable, removed functionality (which may have been restored by now to some extent), was full of bugs, and was glacially slow and balky.
The only possible draw for Wesabe over Mint is the "community" part, which never interested me.
I guess I really see Wesabe as a money-management community with an app attached, not as a money-management app.
I thought the same thing at the beginning of the v2 release, but the features that were important to me came back quickly. There's something pretty nice about seeing your accounts aggregated in one place and then being able to tag them. Mint did a great job, but I always preferred to have my financial data stored with people I trust, even if sometimes the software was rough around the edges (hey, it's a startup!).
Unlike Mint, the Buxfer name is terrible. Like a combination of "busted" and "fked", not associations want with my money. The "bucks for" association does not come through online and is too clever by half. Of course I wish them well-- hopefully the Mint sale will give them a good valuation and they can upgrade the domain name.
Seems a little to expensive to squash and there is some competition to take mints place. So IMHO thats not likely.
It might happen by "accident", thought.
Is this because you have some secret knowledge about the deal, or just because you have a gut feeling about it? Your last sentence seemed a little suspicious, which is why I ask.
Seriously? Maybe I don't get it but if Yahoo had bought Google or Facebook had bought Twitter would those have been terrific exits? Why are they selling out so quickly?
I don't trust Intuit and will probably stop using Mint (I was just getting started in the past few months).
Mint was making a rather significant amount of money as a credit card affiliate. (They also hawked other financial products, but that is almost certainly the most lucrative one. They have a lucrative CPA, a wider reach than home loans, and more repeat business in the demographics inclined to hand all their financial info to a Web 2.0 site.)
Many, many affiliates who look at a million dollars as "Meh, not a lot of money to me anymore" physically drooled when they heard of Mint's model, principally because almost nobody realizes they're an affiliate marketer. As an affiliate, you (potentially) make a lot of money but defensibility of your revenue is a constant driving concern since Google, the merchant, or other affiliates can always disintermediate you. But who can disintermediate the guy you've already given full read access to your financial life to?
the trouble is cutting thru the sleaze in the industry. But if you're willing to tolerate it, you can find gems in their communities. Wickedfire.com. Shoemoney. DMConfidential. On and On, really.
You're giving me reasons why they could be profitable, not proof that they are. Having a good story for future revenue is not the same thing as having revenue.
Was mint a zero-revenue company? They have at least three angles to cash in on what they have (aside from selling to Intuit): A) Pitching offers from banks for credit cards and accounts. Banks are willing to pay for these, and they have the information to match the right accounts with the right people. B) Offering tax-filing services like TurboTax. C) Sellign aggregate data from their customers (Not my favorite, but it's not necessarily off of the table).
Nobody knows how much revenue they were bringing in, but I imagine it was something...they did have partnerships. My point is only that cashing out for $170M isn't necessarily a terrible idea when you're a fledgling startup with an unproven business model.
They also acquired PayCycle (among the leading online payroll companies, and one I used for a couple of years) a little while back. I switched all of our books and payroll over to Intuit products recently, mainly so the part-time bookkeeper will be happy, but haven't been able to figure out how PayCycle fits into the lineup, or whether they will be merging Intuit online payroll (which costs a measly $9.95/month) with PayCycle (which is about fifty bucks per month).
In Germany it seems common to mail lists of transaction authentication numbers to customers, and in the Netherlands smart card readers that read your card and generate a TAN seem standard. There are companies built around circumventing this and allowing third parties access to your account (sofortueberweisung.de, for example), but it usually is against the bank EULA.
It's important to remember that companies are run for the benefit of investors. These folks just took a C round, so I'd guess the majority of the shares are held by venture capitalists.
VCs don't fund startups to achieve competitive victory per se. Their job is to make money for the people who invested in their funds, and they do that by selling the shares they bought for more than they paid for them. The main routes for that are acquisition and IPO.
Right now, the IPO market is not looking healthy, and won't be for a while. Given that Mint's revenue comes from getting consumers to sign up for credit cards and other financial offers, their market will be anemic for a while. So they're an especially poor IPO candidate for the next few years.
That leaves getting bought. If that's what your after, and Intuit comes along and offers you a great price, why wouldn't you take it? Intuit needs Mint a lot right now, but maybe later Mint's bargaining position will be worse.
The decreasing marginal utility of money meant that it was a good exit for the founders, regardless of whether it would have been optimal for the company in the long run.
I'm not sure I'd call $170m a great exit considering they were last valued at $140m. Generally VCs are looking for much more than a 20% ROI. I'd love to know if there were some special terms that make the VCs get more than their share here. Otherwise you'd think that either Mint was in trouble and needed this, or there was something else going on.
Probably an initial asking price. If anything it strongly suggests that there wasn't much haggling on the price. It would be a huge coincidence if they all haggled on the price and just happened to end up with the same number.
This is terrible news for consumers of the software. Quicken is a horrible product if you like good user interfaces and software that just does the job. You have to constantly handhold Quicken and on top of that, many times your bank will charge you to let Quicken have access to your data. The big two (Quicken and Money) personal finance software suites had no way of competing with Mint. I would rather have had Mint start charging a fee for the service instead of selling out their users. Intuit will probably do both.
Obviously, if your reason for starting a business is to get a huge lottery ticket payout, keeping it free and hoping some megacorp buys you is a great idea. I'm disappointed that this was the plan from Mint. I had hopes they would find a business plan that made them money AND that was good for users.
Of course, if Intuit doesn't fundamentally change Mint, maybe all my handwringing will be for naught. I hope I'm wrong.
I think it's interesting to see people's reactions here -- a good dose of "oh no Intuit" paranoia. But honestly, did anyone not see this acquisition coming? I was expecting them to have to pay more, honestly, but I think it was fairly apparent that Intuit was the obvious buyer and would do what it takes.
The other odd angle to this paranoia: How big do people really think the market of "people who don't trust Intuit with their financial information" is? For millions of people, it's already in Quicken... the step to doing that online, especially for a non-technical user, is not that big.
I don't think it's about not trusting Intuit with financial information. It's about believing Intuit will make a mess of mint.com ruining good and useful about that site.
I just see them not getting Mint and I am reminded when they first added product activation to Turbo Tax.
The DRM would fail and support would tell you to buy the software again. That was enough to drive me from Intuit for good as it just seemed they were far too interested in profit over customer service.
I'm a little surprised by the fact that they sold now for what seems like a low price compared to what Mint would surely have grown into, given all the momentum they'd built up. It seems like they'd solved the hard problem of getting millions of people to let them into their bank accounts and were fast on their way to becoming a household word. I don't see why they couldn't have become a billion dollar company; the competitive landscape was favorable to them. This seems like a home run that turned into a double. I'd be interested to know the back story behind it.
I also think there is a good opportunity to take on the UK equivalent; Kublax. It's a seedcamp company that I tried to use a few times but it was too 'rigid' so I ended up going back to a google spreadsheet.
Wait - this is techcrunch. Didn't they just the other day also boldly claim that Facebook allows faxing of photos? Did they allow both Intuit and Mint a chance to respond? I'll be waiting a few days before cancelling my Mint account before I found out whether or not this is just another bad rumor.
mint is now #1 on my 'notes to self' when i get so focused on engineering my way to a solution i forget sometimes its' better to partner with a competitor and move on.
they outsourced the hard stuff (scraping/banking relationships) and then focused on building a product. nice work, brilliant execution.