Kabbage, closed a $270 million credit facility from Guggenheim Securities.
The Scoop on Kabbage:
- Kabbage (@KabbageInc), which opened three years ago, is a platform for online merchants to borrow working capital.
- Founders: Rob Frohwein, Marc Gorlin, Kathryn Petralia
- They provide capital to small businesses (so far $250 mill) that have become unprofitable for traditional banks to target.
- “Built on the idea of big data and the fact that many of these businesses are already primarily online operations, Kabbage takes into account datapoints not just from a company’s balance sheet but also their performance across different sales channels, when evaluating a loan or repayment schedule. Repayments and interest are calculated on a basic sliding scale, depending on the amount and the period over which you will repay.” -Tech Crunch
- The opportunity: there are 15-20 million online businesses that are currently in need of capital. Online lending platforms are serving around 150,000, Kabbage is the largest with 25,000+ active customers.
The Scoop on the Deal:
- This deal from Guggenheim Securities is one of the largest credit facilities ever issued to a small business lender. (TechCrunch also notes that it is possibly the biggest in the online lending space)
- The funds will be used to build out its financing business both in the U.S. and internationally over the next 12-18 months and for future scaling as well.
- A year ago Kabbage raised $75 million to support merchants on eBay, Amazon & Etsy.
- They have also previously landed $53.7 million of VC funding across three rounds, with investors including BlueRun Ventures, David Bonderman, Warren Stephens, the UPS Strategic Enterprise Fund, Mohr Davidow Ventures, Jim McKelvey (the co-founder & director of Square) Thomvest Ventures and SV Angel.
More:
- On this deal from TechCrunch, The Atlanta Journal Constitution, Reuters, The Wall Street Journal
- On previous funding from CrunchBase
- On the deal from Amazon. Etsy & Ebay
- Kabbage’s Loan Calculator
- On high risk loaning companies from Business Week
- How Big Data Can Expand Financial Opportunities For The World’s Poor from Forbes