Kabbage

Kabbage
Type of site
 Financial Services
Owner Privately Held
Created by
Revenue Increase $200 million(2017)
Website www.kabbage.com
Launched February 12, 2009 (2009-02-12)
Current status Online

Kabbage, Inc. is an online financial technology company based in Atlanta, Georgia.[1] The company provides funding directly to small businesses and consumers through an automated lending platform.[2]

History

Kabbage, Inc. was established in 2009 by Rob Frohwein, Marc Gorlin, and Kathryn Petralia.[1] The financial services data and technology platform based out of Atlanta, Georgia, publicly launched and began making its first loans in May 2011.[3] Kabbage is venture funded and backed by Reverence Capital Partners,[4] SoftBank Capital,[5] Thomvest Ventures, Mohr Davidow Ventures, and BlueRun Ventures[6] and is debt funded by Victory Park Capital.[1] Additional investors include: ING, Santander InnoVentures, Lumia Capital, Scotiabank,[4] TCW/Craton David Bonderman, Warren Stephens,[7] the UPS Strategic Enterprise Fund,[8][9] TriplePoint Ventures,[10][11][12] and Jim McKelvey.[13]

2012, Kabbage opened its San Francisco office and appointed Victoria Treyger as Chief Marketing Officer.[14][15] That same year, Kabbage raised $30 million in Series C financing, led by Thomvest Ventures, and was named one of Red Herring's Top 100 North American private companies.[10][16]

February 2013, the company expanded internationally, entering the United Kingdom,[17] and was named one of the Top 10 Most Innovative Companies in Finance by Fast Company.[18] Also in 2013, Kabbage raised $75 million in debt financing, led by Victory Park Capital and existing investor Thomvest Ventures.[12]

2014, Kabbage raised an additional $106 million in funding from SoftBank Capital, TCW/Craton, Lumia Capital, the UPS Strategic Enterprise Fund, Thomvest Ventures, BlueRun Ventures and Mohr Davidow Ventures.[5] In April 2014, Kabbage closed a $270 million credit facility from Guggenheim Securities, the investment banking and capital markets division of Guggenheim Partners.[19] A BBB debt rating was obtained by Kabbage on $136 million of Class A notes that were part of the $270 million facility obtained from Guggenheim Securities.[20]

Kabbage extends $1 billion each year in working capital funded to small businesses.[21] In 2015, the company was named in Forbes Magazine’s Top 100 Most Promising Companies for the second year in a row.[22][23]

October 2015, Kabbage completed a Series E funding round of $135 million led by Reverence Capital Partners. Holland’s ING, Spain’s Santander (via InnoVentures, Santander's venture capital arm); and Canada’s Scotiabank also participated in the round.[24] This latest funding values the company at over $1 billion.[4] Kabbage also announced a strategic partnership with ING to deliver instant capital to small businesses throughout Spain.[25]

June 2016, Kabbage was named to CNBC's annual Disruptor 50 list of the most forward-thinking and ambitious companies that are revolutionizing industries and markets worldwide.[26] Two months later, Kabbage [27] was named to the Inc. 500 list of the country's fastest-growing private companies for the second year in a row.[28] In August 2016, the company announced the hiring of Jeff Hodges as Chief Financial Officer and Scott Askins as General Counsel and Secretary.[29]

August 2016, Kroll Bond Rating Agency (KBRA) upgraded and affirmed ratings on Class A2-2 Certificates issued by Kabbage Funding 2014-1 Resecurization Trust. The certificates were upgraded from BBB+(sf) to A-(sf) based on structural improvements to the transaction’s concentration requirements and the existence of more historical data relating to Kabbage’s collateral. KBRA also affirmed the ratings on the Class B2A Certificates of BB-(sf), Class B2B Certificates of BB-(sf) and Class B2C Certificates of B+(sf), which were initially rated in November 2015.[30]

October 2016, Kabbage, as a founding member of the Innovative Lending Platform Association (ILPA), unveiled the SMART Box disclosure and comparison tool to help small businesses better assess and compare finance options.[31] In late 2016, Kabbage was included among the Forbes FinTech 50 for 2016,[32] the 2016 Fintech 100 from KPMG and H2 Ventures,[33] and Glassdoor's Best Places to Work.[34]

Kabbage priced $525 million of fixed-rate, asset-backed notes in a private securitization transaction in March 2017. Guggenheim Securities served as sole structuring advisor and initial purchaser of the notes, which were issued in four classes.[35] Kabbage was named to the Fintech 250 — a list of 250 of the most promising private companies applying a mix of software and technology to transform the financial services industry — in July 2017.[36]

August 2017, the company announced the agreement on a $250 million equity investment from a subsidiary of SoftBank Group Corp (“SoftBank”).[37][38] Also August 2017, Kabbage was included in the Inc. 500 list of the country's fastest-growing private companies for the third consecutive year[39] and earned a Frost & Sullivan Best Practices Award.[40]

In November 2017, Kabbage closed a $200 million debt facility with Credit Suisse, allowing the company to increase the number of loans it can make to larger companies in the U.S. and bringing its total debt funding to $750 million.[41] That month, Kabbage released new data gathered in partnership with Bredin, a leading small-business market research firm. According to the findings, 67% of small business owners anticipated increasing revenues by the end of 2017.[42]

Also in 2017, Kabbage ranked 10th among KPMG's Fintech100;[43] was #59 on Entrepreneur's 360 list of the best entrepreneurial companies in America;[44] and was #121 on Deloitte's 2017 Technology Fast 500™ list.[45] Additionally, co-founder Kathryn Petralia was named the ninth most powerful woman in finance by Forbes.[46]

In 2018, Kabbage was named to the Forbes Fintech 50 and earned LendIt Industry Awards[47] for Top Small Business Lending Platform and Fintech Woman of the Year (Kathryn Petralia).[48] They also were named to Inc.'s annual list of the Best Places to Work.[49] Together with Citigroup, the company formed a consortium to address fintech firms’ cybersecurity risks in response to recommendations in a World Economic Forum report.[50]

Kabbage acquired Orchard, a provider of data, technology and analytics to the online lending industry, in 2018 to offer more data-driven services to small businesses and financial institutions.[51]

Product

Kabbage’s small business product is a line of credit up to $250,000, based on a number of data factors, including business volume, time in business, transaction volume, social media activity,[52] and the seller’s credit score.[53] Each draw against the line of credit is considered a separate loan with either six- or 12-month terms.[54] Funds are deposited either into a bank or PayPal account. Each time a borrower takes a loan, he has six months or 12 months to pay it off. Kabbage customers typically utilize advances for working capital for equipment and inventory purchases.[55]

Kabbage expanded its business-to-mobile operations with an iOS and Android app in November 2012.[56][57] That December, Kabbage began leveraging Square transaction data to underwrite funding.[58]

February 2014, Kabbage began extending more than $1 million per day in funding.[59] Within that same month, Kabbage expanded its product offering to lend to brick-and-mortar businesses. Prior to this, Kabbage was developed only to serve online businesses.[60] The expansion also included increasing working capital lines from $50,000 to $100,000.[53]

September 2014, Kabbage began lending $2 million per day to small businesses.[61]

March 2015, Kabbage began licensing its lending platform to power lending for organizations interested in providing financing to their customers,[62] while extending $3 million in deployed capital per day.[63]

Kabbage introduced the Kabbage Card in May 2015, allowing businesses to pay for items at the point of sale with a purchasing card tied to their Kabbage account.[64]

July 2016, Kabbage launched an updated mobile app that supports the entire lending process from application through qualification and funding all within the app.[65] As of December 2017, Kabbage had extended more than $4 billion to over 130,000 small business customers that have connected more than 1.5 million data points to receive instant funding decisions.[66]

Partnerships

February 2012, Kabbage and United Parcel Service entered into an agreement, allowing small businesses to share their shipping histories with Kabbage.[67] Kabbage entered into a partnership with Intuit QuickBooks in Spring 2013 that enables QuickBooks users to link their QuickBooks account to qualify and access capital through Kabbage.[68] Kabbage partnered with Stripe, a company that enables businesses to instantly accept credit card payments online, in August 2013 to underwrite customers based exclusively on Stripe’s payment processing data.[69] Kabbage also teamed up with Xero, a leader in online accounting software, to extend funding to Xero’s customers by leveraging their online accounting data.[70]

March 2015, Kabbage launched its first platform lending partnership with Australia-based Kikka Capital to establish a new small business product powered entirely by Kabbage technology. Through this partnership, Kabbage provides the onboarding, underwriting, and monitoring technology platform, while Kikka Capital manages the operations, marketing funding, and loan servicing.[71]

May 2015, Sage Payment Solutions became the first third-party organization to leverage Kabbage’s technology and data platform.[72] Within that same year, Kabbage also established a partnership with MasterCard to allow Kabbage’s data and technology platform to be available within their business network.[73] In July 2015, Kabbage established a partnership with Experian, allowing Experian to leverage Kabbage’s automated lending platform to its institutional clients serving small businesses and consumers.[74] In March 2016, Kabbage began partnering with the National Federation of Independent Business to make funding from Kabbage available to its members with the click of the button.[75] In April 2016, Kabbage announced a partnership with Santander UK, a subsidiary of Grupo Santander to power automated SMB lending throughout the United Kingdom.[76][77] Later that year, Kabbage licensed its lending technology to Scotiabank to offer an online application process to small businesses in Canada and Mexico.[78]

Building on its 2015 launch in Spain, Kabbage expanded its partnership with ING in October 2017 to power small business lending in France and Italy.[79]

References

  1. 1 2 3 Dahl, Darren. "The Six-Minute Loan: How Kabbage Is Upending Small Business Lending – And Building A Very Big Business". Forbes. Forbes.
  2. ↑ O'Brien, Sara Ashley. "Banks won't lend? Use these guys instead". CNN Money. CNN.
  3. ↑ Williams, Charles. "Kabbage raises USD270m from credit facility". Reuters. Reuters.
  4. 1 2 3 Chapman, Lizette (2015-10-14). "Alternative-Lending Company Kabbage Valued at $1B in New Funding". Retrieved 2015-10-14.
  5. 1 2 Chapman, Lizette. "Kabbage Plans Growth As Alternative Lending Competitors Plan IPOs". Wall Street Journal. Wall Street Journal.
  6. ↑ Seward, Christopher. "Kabbage gets fresh growth funding". AJC.com. AJC.com.
  7. ↑ Clark, Patrick. "Kabbage Expands Its Cash Advances to Brick-and-Mortars". Bloomberg Business. Bloomberg.
  8. ↑ Knapp, Alex. "Kabbage Raises $30 Million To Boost Its Small Business Financing". Forbes. Forbes.
  9. ↑ Portillo, Caroline McMillan. "Kathryn Petralia is slinging more Kabbage than ever". Bizwomen. Atlanta Business Chronicle.
  10. 1 2 Rao, Leena. "Data-Focused Online Merchant Lender Kabbage Raises $30M From UPS, SV Angel And Others". TechCrunch. TechCrunch.
  11. ↑ Credeur, Mary Jane. "Kabbage Gets $75 Million Debt Deal From Victory Park, Thomvest". Bloomberg L.P. Bloomberg.
  12. 1 2 Rao, Leena. "Kabbage Raises $75M In Debt To Fund Online Merchants On Amazon, eBay, And Etsy". TechCrunch. TechCrunch.
  13. ↑ Rao, Leena. "Square Co-Founder And Others Put $17M In Online Merchant Lender Kabbage". TechCrunch. TechCrunch.
  14. ↑ Kabbage opening San Francisco office, names CMO – Atlanta Business Chronicle. Bizjournals.com. Retrieved on 2013-09-04.
  15. ↑ "Victoria Treyger Joins Kabbage As Chief Marketing Officer; Kabbage To Open San Francisco Office". PRNewswire. PRNewswire.
  16. ↑ 2012 Red Herring North America: Winners Red Herring. Retrieved on 2014-11-20.
  17. ↑ Rao, Leena. "Kabbage Brings Data-Focused Online Merchant Lending To The UK". TechCrunch. TechCrunch.
  18. ↑ The World's Top 10 Most Innovative Companies in Finance | Fast Company | Business + Innovation. Fast Company (2013-02-11). Retrieved on 2013-09-04.
  19. ↑ https://techcrunch.com/2014/04/09/kabbage-270m-loans/
  20. ↑ "Kabbage Attains BBB Debt Rating". PRWeb. PRWeb.
  21. ↑ Henry, Zoe. "How This Company Books $1 Billion Annually In Small Business Loans". Inc.com. Inc.
  22. ↑ "America's Most Promising Companies". Forbes. Forbes.
  23. ↑ Slade, Hollie. "The Women Who Built Outstanding Companies". Forbes. Forbes.
  24. ↑ Lunden, Ingrid. "Loan Platform Kabbage Raises $135M At A $1B Valuation, Grows Credit Line to $900M". TechCrunch. Retrieved 2015-10-14.
  25. ↑ NBuhayar, Noah Buhayar. "ING Picks Kabbage to Expand Small-Business Lending in Europe". Bloomberg.com. Retrieved 2016-02-24.
  26. ↑ staff, CNBC com (2016-06-07). "2016 Disruptor 50: No. 35 Kabbage". CNBC. Retrieved 2016-06-07.
  27. ↑ Novack, Janet. "The Forbes Fintech 50 For 2016". Forbes. Retrieved 2017-01-06.
  28. ↑ "Kabbage: Number 183 on the 2016 Inc. 5000". Inc.com. Retrieved 2016-08-24.
  29. ↑ "Kabbage Announces New Executive Hires". Crowdfund Insider. 2016-08-17. Retrieved 2016-08-24.
  30. ↑ https://www.krollbondratings.com/announcements/2704
  31. ↑ Rudegeair, Peter (2016-10-24). "Online Small-Business Lenders Display Loan Prices". Wall Street Journal. ISSN 0099-9660. Retrieved 2017-01-06.
  32. ↑ Novack, Janet. "The Forbes Fintech 50 For 2016". Forbes. Retrieved 2017-01-06.
  33. ↑ "2016 Fintech 100". h2.vc. Retrieved 2017-01-06.
  34. ↑ "Glassdoor - Best Small and Medium Companies to Work For". Glassdoor. Retrieved 2017-01-06.
  35. ↑ Lunden, Ingrid. "Kabbage nabs $500M for small business loans". TechCrunch. Retrieved 2017-05-08.
  36. ↑ "The Fintech 250: The Tech Startups Redefining The Financial Services Industry". CB Insights Research. 2017-07-03. Retrieved 2017-08-18.
  37. ↑ Lunden, Ingrid. "Kabbage gets $200M from Credit Suisse to expand its AI-based business loans". TechCrunch. Retrieved 2017-11-20.
  38. ↑ https://www.kabbage.com/blog/kabbage-softbank-investment
  39. ↑ "The Complete Inc. 5000 List of America's Fastest-Growing Companies of 2017". Inc.com. Retrieved 2017-08-18.
  40. ↑ "Frost & Sullivan's Best Practices Awards recognize companies". Frost & Sullivan. Retrieved 2017-08-18.
  41. ↑ Lunden, Ingrid. "Kabbage gets $200M from Credit Suisse to expand its AI-based business loans". TechCrunch. Retrieved 2017-12-27.
  42. ↑ "Small-Business Owners Expect to See Higher Revenues by the End of 2017, According to New Report". Inc.com. 2017-11-20. Retrieved 2017-12-27.
  43. ↑ Miller, Kent (2017-11-16). "2017 Fintech 100 announced". KPMG. Retrieved 2017-12-27.
  44. ↑ "The Best Entrepreneurial Companies in America". Entrepreneur. Retrieved 2017-12-27.
  45. ↑ "2017 Technology Fast 500 award winners | Deloitte US". Deloitte United States. Retrieved 2017-12-27.
  46. ↑ merrileebarton. "No. 9: Kathryn Petralia - pg.10". Forbes. Retrieved 2017-12-27.
  47. ↑ Fintech, LendIt. "LendIt Fintech Names PitchIt Competition Winners And Second Annual LendIt Industry Award Winners". www.prnewswire.com. Retrieved 2018-10-05.
  48. ↑ Schifrin, Janet Novack,Matt. "The Forbes Fintech 50 For 2018". Forbes. Retrieved 2018-04-05.
  49. ↑ "Spread the Word: Kabbage Is No. 449 on the Inc. 5000 This Year!". Inc.com. Retrieved 2018-10-05.
  50. ↑ Clozel, Lalita (2018-03-06). "Citigroup, Kabbage Form Consortium on Fintech Cybersecurity". Wall Street Journal. ISSN 0099-9660. Retrieved 2018-04-05.
  51. ↑ "Kabbage plan in Orchard deal: Expand offerings to banks, small businesses". American Banker. Retrieved 2018-10-05.
  52. ↑ Credeur, Mary Jane. "How Kabbage Crowdsources Credit Scores". Bloomberg L.P. Bloomberg.
  53. 1 2 Quittner, Jeremy. "Why Banks are Missing the Point". Inc. Inc.
  54. ↑ "6 Alternative Funding Resources for Ecommerce Businesses". www.practicalecommerce.com. Retrieved 2016-06-07.
  55. ↑ Fest, Glen. "Kabbage's Fresh Idea for Small Business Finance". American Banker. American Banker.
  56. ↑ Perez, Sarah. "Kabbage Brings Its Small Business Lending Service To Mobile". TechCrunch. TechCrunch.
  57. ↑ Ungerleider, Neil. "THIS STARTUP IS GIVING CASH ADVANCES TO BUSINESSES VIA SMARTPHONE". Fast Company. Fast Company.
  58. ↑ Knapp, Alex. "Kabbage Now Uses Square Data To Provide Business Funding". Forbes.
  59. ↑ "Kabbage Funding Over $1 Million Per Day". PRWeb. PRWeb.
  60. ↑ Davidson, Paul. "Small businesses turn to alternative lenders". USA Today. USA Today.
  61. ↑ Portillo, Caroline McMillian. "Kathryn Petralia is slinging more Kabbage than ever". Upstart Business Journal. Upstart Business Journal.
  62. ↑ "Kabbage Launches Technology Platform Licensing Business". Maize Marketing. Maize Marketing.
  63. ↑ Cowley, Stacy. "Online Lenders Offer a Faster Lifeline for Small Businesses". New York Times. New York Times.
  64. ↑ Titlow, John Paul. "KABBAGE, THE SMALL BIZ LENDING PLATFORM, NOW HAS A DEBIT CARD". Fast Company. Fast Company.
  65. ↑ Vetter, Moira. "Kabbage's New Mobile App Reinforces Transition From Fintech To 'Techfin'". Retrieved 2016-08-24.
  66. ↑ "Phenomenal Growing Season: Kabbage Extends $4 Billion+ to 130,000+ US Small Businesses". Crowdfund Insider. 2017-12-06. Retrieved 2017-12-27.
  67. ↑ Rao, Leena. "UPS Partners With And Backs Online Merchant Lender Kabbage; Will Provide Data For Underwriting". TechCrunch. TechCrunch.
  68. ↑ Knapp, Alex. "Kabbage Partners With Intuit To Extend Financing To Offline Businesses". Forbes. Forbes.
  69. ↑ "Kabbage and Stripe Partner to Fuel Small Business Growth". TechieInsider. TechieInsider.
  70. ↑ "Kabbage and Xero Partner to Deliver Instant Financing Using Accounting Data". Digital Journal. Digital Journal.
  71. ↑ Lunden, Lunden. "Kabbage's SMB Loan Platform Moves Into Asia Pacific As A White-Label Service". TechCrunch. TechCrunch.
  72. ↑ Fidler, Julie. "Sage Adds Kabbage to Small Business Service Recipe". Small Business Trends. Small Business Trends.
  73. ↑ Marks, Gene. "Main Street Morning: Powdered Alcohol". Washington Post. Washington Post.
  74. ↑ "KABBAGE, COOPERATION AND WHY WE CAN ALL BE FRIENDS". PYMNTS. PYMNTS.
  75. ↑ "Online lending taking off". baystatebanner.com. Retrieved 2016-06-07.
  76. ↑ Dunkley, Emma (2016-04-03). "Santander UK teams up with Kabbage to offer fast loans to SMEs". Financial Times. ISSN 0307-1766. Retrieved 2016-06-07.
  77. ↑ "Santander soft launches Kabbage in UK". Finextra Research. 2016-04-04. Retrieved 2016-06-07.
  78. ↑ "Kabbage Licenses Its Digital Lending Technology to Scotiabank". American Banker. Retrieved 2016-08-24.
  79. ↑ http://www.altfi.com/article/3651_softbank_backed_kabbage_expands_licencing_deal_with_ing
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