Austin Ventures announced the recapitalization of CreditCards.com, the leading online destination for consumers to search, compare, and apply for credit cards. Additionally, Elisabeth DeMarse, former CEO of Bankrate, the Internet’s leading aggregator of financial rate information, was named CEO of the company.
“As traditional marketing channels for credit card companies have increased in cost and decreased in effectiveness, leading issuers have diverted their attention and meaningful resources to the Internet for customer acquisition. Creditcards.com’s rapid growth and industry leadership position is a direct result of its creative use of advanced web-based technology leveraged to aggressively service its card issuing partners and their customers’ evolving needs. Elisabeth DeMarse, whom we partnered with earlier this year through our CEO-in-Residence program to find an opportunity such as this, is uniquely qualified to take the reigns to help steer the future growth of this exceptional company,” commented AV Partner Craig Milius.
“I am delighted to be joining CreditCards.com. The company is the number one player in the credit card marketing sector and is extremely well positioned to expand both its market share and the range of services it provides to consumers and card issuers,” stated Ms. DeMarse. Ms. DeMarse has over 20 years experience in senior management roles of leading information services companies including Bankrate, Hoovers, Bloomberg L.P., and Citibank. Most recently, Ms. DeMarse served as President and Chief Executive Officer of Bankrate, Inc. (Nasdaq:RATE). Recruited by its Board of Directors, she restructured this internet media company to deliver significantly improved operating results. During Ms. DeMarse’s tenure, she quintupled unique visitors and page views; increased revenue 560%; significantly expanded operating margins to 32%; and delivered 11 quarters of consecutive EPS. Her accomplishments led to a market cap increase from $12 million at her hiring to $300 million, representing an increase in stock price of 1200% in three years. Ms. DeMarse is a graduate of the Harvard Business School and Wellesley College, and a member of The Committee of 200.
AV partnered with American Capital Strategies (ACAS), a publicly traded buyout and mezzanine fund, to provide the debt financing for the transaction. Additionally, both ACAS and CreditCards.com’s founder Dan Smith made equity investments in the recapitalized entity.
“This new relationship we have formed with Austin Ventures, American Capital, and Elisabeth DeMarse will provide additional resources to enable CreditCards.com to further expand its business and strengthen its position as the pre-eminent online marketplace serving the needs of credit card issuers and consumers seeking credit cards,” said Dan Smith, founder of CreditCards.com. “We are delighted to add the talent and strength of these fine firms and a proven executive of Elisabeth’s caliber to our company,” he added. While Dan is stepping down from his CEO role, he will remain on the Board of CreditCards.com and will continue to be a significant shareholder and an active participant in the company.
K.L. Consulting, Ltd., of Dallas, TX, advised CreditCards.com in the transaction.
About Austin Ventures
Austin Ventures has been working with talented entrepreneurs to build valuable companies since 1979. With $3 billion under management, AV is the most active venture capital firm in Texas, and one of the most established in the nation. With a focus on business services, information services, computer and communications hardware, and enterprise software, Austin Ventures invests at all stages of company development, from $100,000 “planned experiments” to $50+ million investments in management buyouts. Visit austinventures.com for more information.
CreditCards.com is an Internet publisher and marketing organization that operates the leading and fastest growing online destination for consumers to search, compare, and apply for credit cards. The company matches millions of consumers each year with the credit card offers that best meet their financial needs. CreditCards.com is based in Austin, TX and was founded in 2003.
About American Capital Strategies
American Capital is a publicly traded buyout and mezzanine fund with $11.5 billion in capital resources. American Capital invests in and sponsors management and employee buyouts, invests in private equity buyouts, provides capital directly to early stage and mature private and small public companies and through its asset management business is a manager of debt and equity investments in private companies. American Capital provides senior debt, mezzanine debt and equity to fund growth, acquisitions, recapitalizations and securitizations. American Capital invests from $5 million to $500 million per company.