THE BASIS POINT

Fox News empire buys Credible, validating marriage of media & consumer finance

A few Points on the Murdoch Fox empire going deeper into consumer fintech and real estate by purchasing Credible…

RECAP OF FOX’S FINTECH M&A DEAL WITH CREDIBLE

Did Lachlan Murdoch’s Fox Corp just set off a fintech M&A tsunami?

Maybe. It just paid $265 million for a 67% stake in Credible, a consumer finance advice and comparison site.

Credible might’ve fit well into Lending Tree’s strategy of advising consumers on financial options and connecting them with finance pros.

For perspective, Lending Tree has a market cap of $4 billion, and Fox has a market cap of $22 billion.

So it’s a snap for either incumbent to buy Credible at a $397 million-ish valuation.

But Fox jumped in first. Plus Lending Tree pioneered the core model Credible (and others like Nerd Wallet and Credit Karma) use, so their deal priorities are different—more on that below.

Now Fox gets to plug Credible into the Fox Business media machine to reach millions more consumers.

And Credible gets $75 million in capital to grow aggressively over next 2 years.

Masterful deal by Credible CEO Stephen Dash.

HOW FOX’S FINTECH & REAL ESTATE STRATEGY HELPS CONSUMERS

But it goes deeper.

Fox Business and countless other Fox news, sports and entertainment TV assets are just the tip of the Credible brand building iceberg.

The Fox family (via News Corp) also owns Realtor.com and OpCity. Reminder: Fox Corp and News Corp are two separate orgs, but family synergy prevails.

Realtor.com is a scale competitor to Zillow that helps you with the entire journey of finding, buying and owning a home.

And OpCity is the technology that helps Fox first connect with you online then connects you with pros to help shepherd you on your journey.

Both of these News Corp companies are highly sophisticated, and also get to leverage the media power of the Fox Corp side of the family.

This is as big as it gets.

You can hear the promos now:

“Next up on Fox: Credible financial advice on home loans.”

Then the Fox digital strategy machine ushers you into and through the journey.

As a consumer you don’t necessarily know how all these dots are connected.

But you’ll get good advice, help from the right pros, and you gain confidence in financial decisions you’re making.

CONSUMER FINTECH MUST HAVE A MEDIA PLAY TO WIN BIG

All consumer finance and real estate companies vying to work with you are trying to figure out 2 things:

1. How do they first connect with you?

2. How do you they keep you once they’ve connected?

Because of this, the winning fintech and real estate players must be scale media companies AND scale service providers.

Zillow aka The Netflix of Homes, has known this for years.

The strategy is to connect with you via media you’re already consuming.

And, in this Fox/Credible case, they keep your attention with hyper-relevant engagement like Realtor.com.

That’s why Credible executive chairman Ron Suber said this Fox/Credible deal is:

“The beginning of the big public incumbents acquiring fintechs. The tsunami is coming. Buckle up.”

Which brings us back to firms like Lending Tree and Credit Karma.

Lending Tree already knows M&A cold, having closed 8 acquisitions in the past few years ranging from $20 million to $370 million. So they’ll be surfing this tsunami like a pro.

Credit Karma is privately valued around $4 billion and delayed IPO plans last summer. But they have 85 million customers and growing, so they’ll be high on this deal making wave as well.

Same with Nerd Wallet and a host of other media-focused fintech startups.

And this is to say nothing of the consumer fintechs who actually provide banking services to you.

The most similar media/banking service model today is Acorns/CNBC.

This Fox/Credible deal adds legitimacy to this marriage of media and consumer finance, and we’ll keep covering the nuptials for you.
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Reference:

Deal details of Murdoch’s Fox Corp acquisition of fintech Credible (Reuters)

Deal for consumer lending marketplace Credible key part of Fox’s digital strategy (WSJ)

After San Francisco fintech deal, super-investor Ron Suber says: The Tsunami Is Coming (SF Biz Times)