Kabbage’s New CFO On Growing the Company Into A Small Business’s Entire Financial Platform

Scott Rosenberg is only a few weeks into his tenure as the new chief financial officer at Atlanta fintech unicorn Kabbage, but he’s jumped right into speaking to the company’s small business customers to devise a detailed plan for strategic growth. The experienced CFO is taking the long view, focusing on “building a much bigger, better, more efficient business for the long-term.”

As president and CFO of payroll-deduction company Purchasing Power, Rosenberg doubled cumulative revenues from $1 billion to $2 billion in less than three years, and helped raised more than $600 million in outside capital to fuel faster growth. Now he hopes to see similar growth at Kabbage.

“My focus as CFO there was one to [oversee] process efficiency and scale perspective to support the growth. That previous experience really dovetails nicely with what the mission here is at Kabbage, especially focusing on hyper growth business opportunities,” says Rosenberg.

Kabbage, a machine learning-powered loan platform for small businesses, recently acquired online lending startup Orchard for their data capabilities. As of June 2018, over 145,000 small business customers accessed over 1,000,000 loans through Kabbage, in a record total of more than $5 billion in funding.

From the team and business model to its fast-moving growth trajectory, Rosenberg shares that there were many factors that attracted him to the fintech company, but one stands out. “There’s a social aspect to this business model in terms of the fact that we’re in business to help small businesses be successful.”

“It’s not all about us; it’s about us and the small business owners in America.”

Rosenberg shares insights into his evolving road map for Atlanta’s fintech unicorn, how he’s getting to know Kabbage’s customers, and discovering potential M&A’s to fuel organic, disciplined growth.

What are your immediate goals for Kabbage?

There are several tracks for growth. First, there’s the organic growth track, which is building upon the legacy business that has been built over the last six, seven years. We’ll continue to help fuel that growth by bringing in the right amount of process improvement to help the business scale in the business that it was founded on.

Secondly, there’s organic growth of new products and services that we can develop. How do I help influence the best way to bring products to market? Then once they’re in market, again, it’s an efficiency scale play over time.

Then the third leg of the growth, still in mind, is merger and acquisitions activity. These strategic options include M&A’s, partnerships and joint ventures in any number of ways. This helps drive speed to market, to expand the business platform, and the opportunity to drive those small businesses.

How will you approach and spot those potential M&As and partnerships?

We look at the different service offerings or products that we could assemble, again, to really address what I consider the financial management ecosystem of small businesses. You think about it: their passion is really whatever business they bring to market — It could be as a retailer, it could be as a baker, it could be as a florist. But passion, usually, is not, ‘How do I fund the business?’ ‘How do I make my payroll process better?’ ‘How do I make my vendor payments easier?’ I think that opportunity is there for us to bring a solution to them, to really own and handle all the financial management avenues of a small business and leave them to what they’re passionate about.

With that as a backdrop, one of the things that I’d be most interested in looking for is how can we expand from just providing growth capital to these small business owners, to really serving as their financial service partner to help them fuel their business and focus on what they do best. They can leave financial management to the experts like us. That should then in turn dictate what to look for in terms of M&A targets and then how you value what their value is to us, and to our customers, based on the strategy of creating this ecosystem.

How did you get to know Kabbage’s customers so you could figure out what they need?

I come from a parallel space at Purchasing Power, where we’re offering financial solutions to consumers. This is more on a B2B customer base and I’ve been interacting with those for almost 15 years now. For me, the B2B customer has always been paramount, even when I was in B2C businesses, because the access to the end customer was through the B2B customer.. The consumer was through that B2B relationship.

I’ve been spending time on the phones with our customer service agents and sales agents. It’s all part of my arsenal to get closer to that end customer — understand what their concerns are, what their aspirations are, what they’re trying to solve for, so that I can take that and think about what do we need to do. How can I partner with the rest of the business leaders here to help craft our solutions to knock down the obstacles or the challenges that our customers are facing?

Do you have a specific timeline to move from feedback to actionable insights?

I’ll do about a 30-45 day state-of-the-state, which is basically my assessment of the business from the interviews that I’m doing internally, from those phone calls to understand the customer, to understand the processes and the connective tissue of the business. Then from there, in about 90 days, I’ll lay out the road map, not only for the financial operations of a business, but those things that can influence the business processes and the business strategies.

How do you hope to lead this growth in a disciplined, but organic way?

That’s where a lot of companies struggle. Are they able to grow at the rate that they want to? Are the infrastructure, the people, the process and the technologies supportive of those growth expectations? Based on the strategy for growth, how do you then build sub-strategies around behind around how you service growth? What’s the people strategy? What’s the business strategy that then yields processes? We’re now building all those things in tandem, as opposed to just having an aspirational top-line growth objective and then waiting to figure everything else out.

I think it’s connecting the three main strategies of the business: first, business strategy, which includes growth. Then, financing strategy that makes sure that the appropriate capital is available to fuel the growth. Then I’d say the third major strategy that every organization needs is people strategy to help deliver the growth. That’s what I expect to bring to the table.