gets sweet offer from Intuit

Intuit Inc. has agreed to buy for $170 million in cash after an unsuccessful attempt to build a rival Web-based personal financial software service under its Quicken brand. The deal is expected to close in the fourth quarter.

Mint, which has more than 550,000 active users of its service that helps track personal finances over the Web, has raised just over $31 million in VC funding since 2006 from Benchmark Capital, DAG Ventures, First Round Capital, Shasta Ventures, Sherpalo Ventures, Felicis Ventures and Hite Capital. Individual investors in Mint include Ron Conway, Mark Goines, Geoff Ralston and Dave McClure.

Goines said that Mint management had no plans to sell the company when Intuit called and offered to buy it. After all, Mountain View, Calif.-based Mint had launched only two years ago and earlier this year had raised $14 million in a Series C round at an increased valuation.

Goines, who once ran Intuit’s TurboTax and Quicken business units, said that when he invested Mint was the best of several startups he looked at that were offering personalized money management. He said the decision to sell was difficult, but that the chance to get bigger faster was too good to pass up.

Mint develops online budgeting software that allows people to see where their money is going and offers suggestions on how to save.

One attraction to investors, though, was what Goines called Mint’s unique business model to generate leads for financial advertisers, which he said was a “win-win” for everybody involved.

Goines and Rob Hayes, a partner at First Round Capital, also said Mint’s management team was among the best the firm had seen because the company had identified a problem that its team members were passionate about solving.

The deal is part of Intuit CEO Brad Smith’s drive to expand offerings of Web-based services, a market that is growing far faster than the PC-based software that the company has sold since it was founded in 1983. Intuit launched a rival product to Mint in January 2008, initially charging $2 per month for the Quicken Online service. Intuit stopped charging for the product in October 2008 reportedly because of difficulty competing with Mint, which is free and makes money referring users to banks and other advertisers.

Intuit Senior Vice President Dan Maurer told Reuters that Quicken Online has “many fewer” active customers than, though he declined to elaborate.

While Intuit will continue to offer a service using the Quicken Online brand, it will switch over to the Mint technology and advertising model. Quicken Online currently does not include any advertising.

Hayes also said that Intuit is trying to be the leader in providing software as a service for financial services, and he said that Smith, who’s been CEO of Intuit less than two years, has been “appropriately aggressive” about making acquisitions.

“I bought a lot of companies when I was at Intuit, and I always bought the leaders. Smith is living up to that reputation,” he said.

—Deborah Gage. Jim Finkle of Reuters contributed to this report.