Business Operations Business Models

How Does NerdWallet Make Money (Business and Revenue Model)

The NerdWallet business model

How Does NerdWallet Make Money?
Here’s what you should know:
  • What is NerdWallet, and how does NerdWallet work?
  • How does NerdWallet make money?
  • Fees Paid by Partners
  • NerdWallet’s Subsidiaries, Acquisitions, and Exits
  • NerdWallet’s profit and revenue
  • What is the NerdWallet business and revenue model?
  • NerdWallet’s funding and valuation

How does NerdWallet make money if it’s free to use? Here is a full breakdown of their main revenue stream, as well as the NerdWallet business model, their profit and revenue, and how NerdWallet works.

What is NerdWallet, and how does NerdWallet work?

NerdWallet is a personal finance company that offers financial advice by comparing products like credit cards, loans, insurance, and more.

Founded in 2009 by Tim Chen and Jacob Gibson, NerdWallet now attracts more than 21 million unique users per month to its website.

How NerdWallet works is: Users can go to the NerdWallet website or download their app to compare financial products like mortgages, credit cards, and more. Or, to take advantage of using some of NerdWallet’s financial tools like online calculators, credit score monitoring, net worth tracker, or managing your money. All for free.

Some of NerdWallet’s competitors include Credit Karma, LendingTree, Bankrate, Policygenius, and other loan comparison websites.

NerdWallet App in Apple App Store | NerdWallet Business Model | How Does NerdWallet Make Money?
Source: Apple App Store | NerdWallet

How does NerdWallet make money?

According to NerdWallet’s IPO filing with the SEC, their website receives roughly 21 million unique users per month. So how does NerdWallet make money off of all those users visiting the site?

Below is a breakdown of how much money NerdWallet makes and its revenue model. Including all revenue streams and how much they charge for their services.

Here is how NerdWallet makes money in 2022

NerdWallet has a revenue model that makes money in only one (1) way; fees paid by partners.

#1. Fees Paid by Partners

If you ever used NerdWallet before, you may have noticed their “Advertiser disclosure” at the top of each page. This is how NerdWallet makes all of its money – by earning a fee or “commission” through its third party partners.

The way NerdWallet makes money from this is by every time a NerdWallet customer fulfills all the criteria set forth in the agreement between NerdWallet and the partner (e.g. a user applies for and gets approved for one of the partnering products being advertised to that user), NerdWallet receives payment from that partner.

These agreements are in the form of revenue per action, revenue per click, revenue per lead, and revenue per funded loan.

And all of the company’s advertising partners fall into three product categories below where they generate their revenue from: credit cards, loans, and other verticals (insurance, banking, investing, and SMB products). The revenue breakdown is as follows:

  • Credit Card Revenue: $78.2 million
  • Loan Revenue: $81.3 million
  • Other Verticals Revenue: $85.8 million
How Does NerdWallet Work | NerdWallet Business Model | How Does NerdWallet Make Money?
Source: NerdWallet

Note: NerdWallet partners with over 200 third party financial institutions, lenders, etc. (You can see the full list of NerdWallet partners, here)

NerdWallet’s Subsidiaries, Acquisitions, and Exits

To date, NerdWallet, Inc. has made a total of 3 acquisitions.

NerdWallet Acquisitions
Source: Crunchbase

NerdWallet’s profit and revenue

In 2020, NerdWallet reported $245.3 million in revenue.

Note: Because NerdWallet, Inc. is a privately held company, they are not required to make their annual reporting, such as Form 10-K’s, pubic.

What is the NerdWallet business and revenue model?

NerdWallet makes money through a few revenue models that they combine within their company, they are:

  • Commission based business model
  • Advertising business model
  • B2B2C (partnerships) business model
  • Mergers & acquisitions (M&A) business model

NerdWallet’s funding and valuation

According to NerdWallet’s Crunchbase profile, NerdWallet has raised $105 million over 6 rounds and has an estimated valuation of $5 billion.