U.S. household debt reached a record high of $14.6 trillion last year, according to the Federal Reserve.
Consumers often take on debt through loans, which may help them meet financial goals but sometimes come with unfavorable terms that may not always fit their long-term finance goals.
To provide a more personalized, guided loan experience for everyday consumers and small and midsize businesses (SMBs), Durango-based On the Barrelhead has been using artificial intelligence to customize its debt advice platform since 2017.
Last week, the startup was acquired by NerdWallet, a financial guidance app with a reported revenue of $379.6 million as of last year.
Through the acquisition, NerdWallet will acquire all of the outstanding shares of On the Barrelhead for approximately $120 million. The price tag includes $70 million in cash and $50 million in NerdWallet stock.
“Our vision for a trusted financial ecosystem means we’re able to provide consumers and SMBs with a trusted platform to learn about various financial topics, shop for products, connect their data and receive data-driven nudges,” NerdWallet co-founder and CEO Tim Chen said in a statement. “On the Barrelhead’s data and technology solutions will help us advance toward our goal by enabling us to leverage consumer information to provide users with relevant financial guidance and more personalized and compelling product recommendations.”
On the Barrelhead’s technology will be integrated into the existing NerdWallet platform. In return, this will further scale NerdWallet’s product offerings and ability to guide small business owners and everyday consumers on how to make strategic money moves.
Prior to the acquisition, On the Barrelhead had a strong run. As of 2021, the startup reported generating approximately $38 million in revenue, growing roughly 90 percent year-over-year, and obtaining $5 million in net income.
“Finding trustworthy guidance and recommendations on how to access capital and consolidate debt is hard to come across for consumers and SMBs,” Sam Yount, CEO and co-founder of On the Barrelhead, said in a statement. “We are excited to be joining NerdWallet’s dedicated and knowledgeable team to unlock more ways for our users to optimize their finances.”
