Apr 23, 2024

New at Plenty

To pick the best Mint alternative, understand why it was shut down

Emily Luk

CPA, CFA - CEO and Cofounder of Plenty

There's no such thing as a free lunch.

I’m a 3rd generation entrepreneur, and I grew up watching my parents build and grow a company together. 

My mom made it simple: businesses survive by making more money than they spend. 

Price - costs of product = margin

The rise of internet-first companies selling digital products and services brought the costs of offering products down dramatically. You no longer had to factor in the cost of manufacturing, shipping, or selling. There were high investments to initially build the software, but once built, you could deliver it to a customer with minimal additional costs.

Software = Price - low cost of product = higher margin

The rise of the “free” product.

Companies like Google, Facebook, Pinterest, and Mint grew dramatically off the backs of a “free product”. 

But none of these products were truly free. They scaled to millions and eventually billions of customers from advertising revenue. And the point of advertising is to get you to buy. The more time, attention, and data a platform like Facebook has, the more opportunities there are to sell precise targeting to advertisers. The more precise, the more likely an ad leads to an advertiser’s next dollar of revenue.

It’s not technically selling your data…. it’s buying your attention. And the more they know about you, the more accurately advertisers can target you. 

Mint was no exception. “Free” sells – and people bought. Within 3 years, Mint scaled to 1.5M users before their Intuit acquisition in 2009 (source: NY Times) . By 2016, they claimed to have 20M users …though curiously, only 4M monthly active users (aka MAUs) at the time of their shutdown (source: Forbes). 

Mint built a “free” offering where you could easily connect your accounts and see your account balances, net worth, and spending all in one place. For millions of people, Mint allowed them to track their entire financial lives in a single place for the first time. I know it was for me and Channing (my husband + cofounder).

Unlike Facebook and Google, though, Mint had some big costs for each additional user they brought on. Connecting accounts isn’t free, especially if you want a more reliable connection. The first versions of “connecting accounts” was giving your login details to a bot that would login and copy all the data into a database. Accounts disconnected regularly and the data wasn’t always reliable. As more companies needed reliable account data, there was a rise in popularity for companies that built data aggregation layers: Plaid, MX, Finicity, and Yodlee. These companies worked to combine scraping with direct integrations (read: building software that plugs in directly to the banks) to get this bank data in a secure and encrypted way. 

But that’s not free.

What does tracking your financial accounts cost a company like Mint?

There’s a real cost for the ability to “see all your accounts in one place”. 

On Plenty, we expect the average millennial couple to have ~20 linked financial accounts between the two of them. If we use the sticker pricing for Plaid (one of the many financial data aggregators), you can see that it can cost up to $5.75 per month to keep this couple’s accounts connected. 

Those are real costs to companies like Mint and Plenty: up to ~$69 per couple per year (there are lower rates with more customers). But when a company decides to cover those and make the product free, it’s probably time to ask: why? And more importantly: how?

Show me the money

Mint used your data (like your account balances and spending trends) to recommend other financial products like new credit cards – or, eventually, Intuit’s TurboTax product. 

Your paycheck just increased in the bank account you linked. You probably got a promotion. Want a new credit card?

You spend a lot on restaurants; want a credit card with cashback for restaurants or 3x points?

Credit card companies were willing to pay hundreds per referral. In a Fast Company interview, Mint’s founder Aaron Patzer mentioned,  “In your first two to three months, on average we were making something like $20 per user… in the next three months, maybe $2 or $3.” (source: Fast Company).

The problem with these referrals, though, is there’s a limit to the number of credit cards an individual reasonably needs. And your credit score is penalized if you open up more than one in a short period of time. Which means the business could only grow by finding ‘fresh’ new customers and eventually, these customers would be saturated. 

But Mint was still paying those account linking costs.

Enter Credit Karma 

With Mint now acquired by Intuit, product development slowed and they missed out on the opportunity that Credit Karma stepped into. 

Credit Karma (founded around the same time as Mint) similarly covered costs on credit score reporting to encourage consumers to create accounts. But unlike Mint who focused primarily on credit cards + ads, there was a lot more money to be made by adding on other kinds of loan products: auto loans, mortgages, student loans, home equity loans. These additional loan types were 14x the market size opportunity of credit card debt, alone (source: Intuit x Credit Karma - SEC filing).

Show me the big money

By 2018, Credit Karma ‘originated’ $40B in credit products (ie. people got loans starting from their site). In 2017 alone, they had earned $500M in revenue (source: Crunchbase). 

When Intuit acquired them in 2022, Credit Karma had provided free credit reporting to 130M people and had 37M users who logged in monthly (source: NY Times and SEC). For each user, Credit Karma had collected 2600 data points that they used to “personalize outcomes” to “find the right financial products” (source: Intuit x Credit Karma - SEC filing). 

Years ago, I wanted to know why so many websites had seemingly identical tables showing loan offers…. Investopedia, Nerd Wallet, and beyond. I figured there had to be something going on:

Source: Bankrate on April 6, 2024

After digging around the legal agreements (ie. privacy policies / terms of service….useful for these kinds of things), and stumbled upon a company called Even Financial (now owned by Money Lion and renamed Engine.Tech). Note: this is not the company Channing and I worked for, called (confusingly) just Even (now owned by One), a company trying to give paycheck to paycheck families a fee-free alternative to payday loans. We believed in less debt. Not more debt. But I digress.

Engine.Tech is the ultimate middleman, and they're everywhere. They help “channel partners” like CNBC, TransUnion, Nerdwallet, etc. “monetize consumers” by serving up loan product recommendations that they can easily put on their website. It’s a similar approach to what Credit Karma does. 

While I couldn’t find the behind-the-scenes for Credit Karma’s numbers…. I did find out that these financial “product providers” pay 2-4% for every loan referred.

If you refinanced a $100k student loan, that’s $2-4k that loan provider would pay whoever sent the customer over. 

That’s 10-20x more revenue than a credit card referral. And here’s another gotcha. By providing your details to determine your loan eligibility, the fine print included a consent to share your personal data, allowing lenders to directly target you with emails and letters. If you’ve ever wondered how banks got your mailing address… that’s probably how.

Back to Mint

The early days of Mint. Source: Doughroller and Mint

With 20M Mint users and any amount of accounts connected, Intuit probably faced the reality of a business that was burning lots of money on account connectivity, had low engagement (4M/20M were active) and were reliant on ad / referral revenue that was not as “efficient” as the debt cross-sell machinery that Credit Karma had built. 

After Intuit acquired Credit Karma, they shut down Mint and tried to move Mint’s ~4M monthly active users / 20M accounts into the Credit Karma business. Jury’s still out on how successful they were but I’m waiting for the quarterly financial report to come out.

Love the product? Buy the product. 

Mint + Credit Karma were built in the same era of “it’s free but you are the product”. It’s free but we make money some other way. 

If you don’t want to be the product, follow the money. If the business model isn’t obvious, be careful. And if you love it - buy it. If it’s a transparent company, buying the product keeps the incentives clean.

A company is the sum of their incentives.

Credit card companies earn some money when you spend (ie. called interchange) and big money when you run up a credit balance and they can start charging 20-40% interest rates. The first credit card referral is probably helpful… but there’s a fine line for debt, and there’s too much referral money to be made to properly safeguard people from being offered more debt products than they should have. Lenders make money when you commit to years of paying them higher interest rates than the treasury rate (and don’t default) ie. mortgages, auto loans, etc.

Companies like Mint and Credit Karma profit from referring you to credit card issuers or lenders, and make money each time you sign up for that new card, take on that new loan, or consolidate your student loans. Sign up? Cha-ching. One and done. They don’t have incentives that tie their revenue and company to your long term financial future. I truly believe that Credit Karma set out to make debt more affordable for everyday families. And I also believe that their business model sets them up to primarily make money the moment you take on debt.

What you see is what you get.

At Plenty, we charge $200 / year per couple + 0.20% annually per dollar invested (that’s $2 for every $1000 you invest).

At $200 per year (for a couple), it’s affordable to a majority of millennial families and a fraction of the $2,000 - $7,500 that financial planners charge (source: Nerdwallet). It’s also high enough to cover those data aggregation fees, build a sustainable business (so we don’t need to sell out), and give us extra to reinvest into building and improving the product experience. 

At 0.20% - whether you have stock/bonds or cash, you know what you pay. For stocks / bonds, the industry average is still close to 1%, a predatorily high access fee for investing. For your cash, banks are used to hiding how much they make. Unlike banks, we set the exact amount we make, then pass the rest of the interest on to you. Over the last 9 years, Americans would have $603B more in their accounts if banks gave higher interest rates to their customers (source: WSJ). 

Aligning incentives for a future where everyday families have more.

We know the financial industry is used to operating a black box with predatory incentives that disproportionately impact families who can least afford it. It’s time to change that. We’re not out to play the same old game of turning you into the product, to profit off of those who need support, or to maximize the amount of money we make in your moment of need.

At Plenty, you’ll always know what you’re paying and how we’re making money. Our business model was built to align incentives; to prioritize affordability, transparency, and sustainability, so we stay aligned to keep growing alongside your family in the many chapters to come.

Your future & our future are rightfully entwined. That truth aligns every part of the company to think about your future, and act in your best interest. 

We have a dream of making wealth more equitable. And if you share this dream, we hope you will consider joining us as a member. If you’d like to give us a shot, you can start your free trial today.



Emily Luk

CPA, CFA - CEO and Cofounder of Plenty

Emily is the ceo and cofounder of Plenty. Started by a husband and wife team, Plenty is a wealth platform built for modern couples to invest and plan towards their future, together. Previously, she was VP of Strategy and Operations at Even (acquired by Walmart/One) and a founding team member of Stripe's Growth and Finance & Strategy teams. She began her career as a VC, and was one of the youngest nationally to complete her CPA, CA and CFA designations.

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