Posts Tagged ‘Kabbage’
Tuesday, May 14th, 2013
Atlanta-based Kabbage Inc., the leading online provider of small businesses financing, announced today that it is the first company to exclusively leverage QuickBooks data to instantly approve and extend funding to small businesses.
This is a significant milestone for the company and marks a major expansion to serve all small businesses, regardless of whether they operate online or offline. Kabbage will now be able to provide its award-winning funding solution to more than four million QuickBooks small business customers, across retail, service, and manufacturing industries.
Kabbage Chairman Marc Gorlin tells the TechJournal, “”Kabbage is beyond excited to start helping offline businesses as we have their online counterparts over the past few years. Before long, we plan to be able to help all small businesses grow.”
Kathy Tsitovich, Director of Business Development for Intuit’s Small Business Group, sais, “Small businesses have long struggled with access to capital. As a company dedicated to helping small businesses succeed, we continually explore how to help them obtain fast and accessible funding options,” said
“We chose to work with Kabbage because we are impressed with the company’s ability to leverage QuickBooks data in real time through our Intuit Partner Platform, and deliver capital to small businesses in just minutes.”
Since launching two years ago, Kabbage has disrupted the traditional world of time-consuming and manual underwriting with its data-driven underwriting platform. The company has innovated rapidly by adding ecommerce, social media, payments, shipping and now QuickBooks accounting data to its Data Context Engine in order to underwrite small businesses instantly and deliver funding to them in minutes.
“Small businesses need partners that understand their business and can help them save time and money,” said Gorlin,
“We are incredibly proud to be the first to exclusively use QuickBooks data to make real-time decisions and deliver funding to businesses in minutes. We’ve been often asked when Kabbage would support the bricks and mortar counterparts to online businesses. That day has arrived. Today’s expansion dramatically accelerates Kabbage’s vision of democratizing access to capital for all small businesses. ”
Wednesday, April 3rd, 2013
Kabbage Inc., an online provider of small businesses financing, has closed a $75 million credit facility, its largest financing transaction to date.
Victory Park Capital (VPC) led the debt financing, while existing equity investor Thomvest Ventures also contributed a significant amount. The debt facility will fund advances for the company’s rapidly-growing customer base and allow it to expand its reach to new customer segments and markets.
“We have followed Kabbage since its inception and have been exceedingly impressed by the power of its innovative real-time data platform and the team’s ability to scale over the last two years,” said Tom Affolter, Principal at Victory Park Capital.
Fills a market void
“There is a clear void in the market as traditional financing sources remain reluctant to lend. As a firm, we are excited to provide financing to Kabbage as it is uniquely positioned to deploy this capital to meet the demand for funding from small businesses.”
Kabbage Chair Marc Gorlin tells the TechJournal, “This debt facility will turbo charge the amount of growth Kabbage can support for small businesses of every shape and size. We’re proud every day to be supporting the businesses that are the backbone of this country.”
Kabbage’s Data Context Engine uses persistent data connections to understand the true health of a small business throughout the account lifecycle.
Won six industry awards
The company employs real-time data connections to the sources that small businesses use every day such as shipping, accounting, social media, ecommerce, payments and others.
The company and its executives have presented at TechMedia’s Southeast Venture Conference and often participate in its digital summit events (the next is the Digital Summit in Atlanta, May 14-15).
Kabbage has won six major industry awards for innovation leadership in the last nine months, including first place in VentureBeat’s Innovation Showdown, and Top 10 Most Innovative Companies in Financial Services from Fast Company.
“Kabbage’s underwriting platform and ease of use has positioned it as the leading online provider of credit solutions to small businesses,” said Peter J. Thomson, chairman of Thomvest and director of Thomson Reuters Corporation.
Growing at breakneck pace
Since launching two years ago, Kabbage has grown at a breakneck pace to become the industry leader in small business financing, delivering more advances than anyone in the industry.
Kabbage has extended more than 60,000 advances and expects to provide more than 100,000 in 2013 alone. Kabbage advances by volume have grown 298 percent on a year-over-year basis, while overall loan volume to small businesses declined during the same time period according to the Small Business Administration.
“This facility represents an enormous vote of confidence from the institutional investment community in the Kabbage model and a significant milestone in our company’s history” said Rob Frohwein, Kabbage Co-Founder and CEO.
“We have developed a new asset class that allows institutional investors to invest in funding the growth of the small businesses that are the backbone of our economy. You’ll see Kabbage continue to expand our funding platform in innovative ways both to both investors and small businesses, as we redefine what it means to deliver funding to businesses – making the process even more simple, fast and user-friendly.”
Wednesday, February 13th, 2013
Small businesses in the United Kingdom will have an alternative way to finance their operations. Atlanta-based Kabbage, an online provider of working capital for small businesses, has launched in the UK, its first market outside the United States.
Since opening two years ago, Kabbage has quickly become the fastest-growing small business finance company, extending more advances to small businesses than any other provider of working capital.
Kabbage Chairman Marc Gorlin tells the TechJournal,”Small business are at the core of what do. There are small businesses in other countries, and we want to be there to help them. It also helps that the UK is Europe’s biggest e-commerce market.”
Its funding platform leverages dozens of data sources to determine real-time business performance, and delivers funding to small businesses within seven minutes of applying online.
Kabbage’s breakthrough data platform has earned the company top industry accolades including most recently being named one of Fast Company’s Most Innovative Companies and winning first place at VentureBeat’s CloudBeat Innovation Showdown 2012.
Fast Company found them
Gorlin says, “The Fast Company is really meaningful as this wasn’t something you could even apply for. They found us.”
Kabbage has participated in numerous events produced by TechMedia, the TechJournal’s publisher, including the Southeast Venture Conference, which has its seventh annual event coming up in Charlotte March 13-14.
Rob Frohwein, Kabbage Co-Founder and CEO said of the UK move, “Kabbage is deeply passionate about making funding easy and accessible to all small businesses in order to enable growth,” said. “The UK is Europe’s largest ecommerce market but small businesses there face the same challenge that American businesses face — banks are hesitant to lend the capital so desperately needed.
“Given the size and demand of the UK market, it was the natural destination for our first launch overseas. We’re tremendously excited to begin providing UK businesses with access to our simple, flexible funding platform in order to fuel their growth.”
Thursday, September 27th, 2012
Scott Thompson, former president of PayPal, named to Kabbage board of directors.
Kabbage Inc., a provider of working capital for small businesses, has named Scott Thompson, CEO of ShopRunner and former president of PayPal, to its board.
Thompson is currently the CEO of ShopRunner, the leading shopping network that enables merchants to bring the best shopping services to consumers.
Prior to ShopRunner, he was CEO of Yahoo, where questions about his resume led to his resignation, although Thompson said it was due to a health issue.
Experience transcends resume flap
Marc Gorlin, chair of Kabbage tells the TechJournal, “He was unbelievable as president of PayPal and understands financial services and data science better than anyone we know. His experience and assistance far exceeds a trumped up resume flap by a disgruntled investor.”
Thompson served as the President of PayPal from 2008 to early 2012, prior to that he was PayPal’s Chief Technology Officer. While at PayPal he helped scale the company through its most rapid growth years growing it from $1 billion in revenues to $4.4 billion in revenues, and established PayPal as the leading global online payment service.
“Kabbage is rapidly reshaping the small business financing space in the same way that PayPal reshaped the payments space over the last decade,” said Scott Thompson.
“I enjoy working with, and believe I can have the most impact on, companies that are re-inventing the ways financial services are delivered to consumers and small businesses. And specifically, by working with organizations that are uncovering new and unique methods of leveraging data science to attack a massive market. Kabbage has both the opportunity and is on a trajectory to do exactly that.”
Won Entrepreneur of the Year in 2011
In 2011, Scott was awarded the Ernst & Young Entrepreneur of the Year Award for Northern California for his leadership in the Financial Services industry.
“We are thrilled to have the benefit of Scott’s passion, relationships, and experience on as part of our team,” said Rob Frohwein, CEO of Kabbage. “Scott led PayPal through its most formative and highest growth years and we will benefit from those learnings as we continue to accelerate our growth.”
Thompson joins Kabbage’s existing board of directors which includes Rob Frohwein, CEO of Kabbage, Marc Gorlin, Chairman and Co-Founder of Kabbage, Bryan Stolle, General Partner Mohr Davidow Ventures, Jonathan Ebinger, Partner Blue Run Ventures, Bruce Miller, Managing Director Stephens Inc, and Don Butler, Managing Director of Thomvest Ventures.
Tuesday, September 18th, 2012
Atlanta-based Kabbage, Inc., an online provider of working capital for small businesses, has raised a $30 million in Series C financing. That brings the total the company, which provides capital advances to small businesses, to $56 million in equity.
The financing was led by Thomvest Ventures, the venture capital arm of Peter Thomson, Founder and Managing Director of Thomvest Ventures and a director of Thomson Reuters. All major existing investors, including UPS Strategic Enterprise Fund, Mohr Davidow Ventures, BlueRun Ventures, Warren Stephens and David Bonderman participated in the round.
In addition, Ron Conway’s SV Angel also recently invested in the company. Kabbage has received a total of $56 million in equity to date.
Kabbage has a unique, patented funding platform that awards a “Kabbage score” determined from dozens of data sources to evaluate a businesses’ performance. Qualifying businesses can receive a capital advance in less than seven minutes.
“Kabbage has completely redefined small business finance in less than two years,” said Peter Thomson. “Its disruptive business model and technology platform is providing much needed working capital to small businesses quickly and efficiently, helping to drive the overall economy.”
Kabbage chairman Marc Gorlin spoke at last year’s Internet Summit in Raleigh and Kabbage has presented at TechMedia’s Southeast Venture Conference.
“Entrepreneurs and small businesses are the backbone of this economy,” Kabbage Chairman Marc Gorlin tells the TechJournal. “That’s where most jobs are generated.”
Since launching its platform two years ago, Kabbage has grown rapidly and now fuels over $800 million in annual sales for its small business customers. Kabbage customers are very active, taking an average of 10 advances per year to help them grow.
The company has made about 30,000 cash advances to about 60,000 merchants.
“Our customers love us,” Gorlin says. Apple’s Net Promoter Score (a customer loyalty metric) is 74, ours is 75. We treat them like people.”
Its customers are generally doing well, too. After its customers take cash advances from Kabbage, they see their revenue go up by as much as 266 percent, Gorlin says.
He explains that Kabbage works quite differently from banks. “Historically, banks look at credit scores,” Gorlin notes. “We look at how long they have been selling on which marketplaces, how active they are on Facebook and Twitter, how they deal with customer service issues, how often they ship through UPS and other channels, and how engaged and on top of their business they are.”
In the future, Kabbage will expand into the offline world, looking for data on businesses that don’t necessarily sell on the web. It will also expand to the United Kingdom this year and is planning some hiring.
In the last four months, Kabbage has been awarded “the Most Innovative Company in Financial Services” from PYMNTS.com, “Top 100 Private Company in North America” by Red Herring and “Top 10 Innovators of the year” by Bank Technology News – adding to its numerous industry awards for innovation and disruption.
Thursday, January 19th, 2012
Kabbage, Inc., a provider of working capital for small businesses, says its post-holiday 2011 retail study focusing on small-to-medium online merchants indicates a highly successful season, with 69% percent of respondents reporting increased sales.
On average, study participants experienced a 32% hike in sales compared to the 2010 season.
Other notable survey highlights:
- Seasonal promotions were offered by 47% of respondents, with 30% of those promotions including a “Free Shipping” component
- E-commerce companies consistently purchased inventory in the three months leading up to December, with 76% of respondents buying inventory in October
- Half of the respondents reported no rise in product pricing for 2011, with 36% noting higher prices
- Only 11% of surveyed e-retailers reported a drop in sales for the 2011 holiday season
- More than 50% of e-commerce companies had more demand for their products than supply this holiday season and would have benefited from having more cash available to buy inventory.
Kabbage’s study included responses from its client base of small and medium-sized e-commerce companies, representing several industry verticals. The study’s objective is to measure category growth and identify industry trends.
When asked about prospects for 2012, respondents showed solid optimism. Positive attitudes about sales growth in the coming year were shared by 88% of those responding.
Kabbage, which officially launched in October, 2010, has become a critical piece of the operational puzzle for many online merchants. Faced with daunting requirements and even reticence from traditional sources of funding, online merchants have turned to Kabbage for the working capital they need to grow their businesses.
Kabbage is one of 60 innovative companies presenting at the upcoming 6th Annual Southeast Venture Conference at Tysons Corner, VA, Feb. 29-March 1. The conference features speakers such as Marc Randolph, co-founder of Netflix, and ventue capitalists representing firms with $50 billion in capital.
Thursday, November 10th, 2011
By Allan Maurer
Kabbage chairman Marc Gorlin will speak at the Internet Summit Nov. 15-16 at the Raleigh, NC Convention Center.
Remember those cartoons where an alien approaches a fire hydrant or a telephone pole and says, “Take me to your leader?” Turns out it’s not bad advice for startups seeking funding, says Marc Gorlin, chair of Atlanta-based Kabbage.
Kabbage, which provides working capital to online merchants, nabbed a $17 million B round in August led by Mohr Davidow Ventures and its investors include BlueRun Ventures, David Bonderman, founder of TPG Capital, and Warren Stephens, CEO of Stephens Inc., and the UPS Strategic Enterprises Fund.
So Gorlin understands the venture dance. He’ll discuss “The things VCs never tell you about raising money” at next week’s Internet Summit in Raleigh, NC, where he’ll be one of dozens of digital media, marketing and entrepreneurial thought-leaders participating.
And one of the first items on his list of things for entrepreneurs to consider when seeking venture capital is to the right person immediately.
“No firm where we went in through anyone but a senior partner went anywhere,” Gorlin says of Kabbage’s own experiences in finding venture backing. “If you get a meeting with a principal or associate, the odds of it going anywhere sink to infinitesimal levels,” he says.
While Gorlin’s slide presentation uses humor to make its points, the points are serious.
He’s Just Not that Into You
For instance, his “He’s Just Not that Into You,” section warns that “No means no, maybe means no and soft yeses mean no.”
Nevertheless, Gorlin says, persistence is the key. “Never stop trying,” he says. He’ll point out how many times big investors said “no” to investing in a company before they said “yes.”
Gorlin has solid advice for entrepreneurs. He suggests not pitching the most important venture capitalists on a potential list first. “You’ll get better,” he says.
Know your market
One of the most important things for entrepreneurs to do to prepare for a pitch to a VC, he says, “Is to know your market.”
It’s also a good idea to know your VC. “Take people they invested with out to dinner. Talk about the terms they got.”
Gorlin also suggests, “Don’t be afraid of venture capitalists and their pedigrees. Don’t make them smarter than you.”
But if you do get some discouraging comments, don’t think you’re alone. Gorlin says that one firm told the now quite successful Kabbage, “Your management team is weak and not smart enough to make this work.” Uh huh.
He’ll share more of the actual comments Kabbage received during its fund-raising process, stories, facts and other solid, if funny, advice direct from the digital fund-raising trenches.
Internet Summit is near capacity, so if you’re going, better register soon. During its own fund-raising process, Kabbage presented at TechMedia’s Southeast Venture Conference. The 2012 SEVC in Tysons Corner, VA, is set for Feb. 29.
Wednesday, August 17th, 2011
ATLANTA– Kabbage, Inc., a provider of working capital for online merchants, today announced it has secured $17 million in Series B funding, led by Mohr Davidow Ventures. Existing investors participating in the round include BlueRun Ventures, David Bonderman, founder of TPG Capital, Warren Stephens, CEO of Stephens Inc., and the UPS Strategic Enterprise Fund.
Several individuals also participated in the round including Jim McKelvey, co-founder of Square. Kabbage will use this funding to pursue additional marketplaces, distribution relationships, new financial products and international expansion.
“All businesses, but especially those online have an unquenchable thirst for capital to grow,” Kabbage Chairman Marc Gorlin told the TechJournal in an interview. “That thirst is not being quenched by the banks. They don’t understand the data for online businesses, and even if they did, they’re not in a position to provide advances or loans under $100,000 profitably.”
He adds, “Kabbage is doing what banks don’t.”
Thousands of online merchants advanced working capital
“Thousands of online merchants have obtained working capital and grown their businesses since our push into the market in April 2011,” said Rob Frohwein, Kabbage Founder and CEO. “Although small business fuels the majority of growth in the U.S., it is extremely difficult and time consuming for these businesses to apply for and actually receive financing from a traditional bank. Kabbage fills this need by providing money to these businesses in a quick, easy and painless way, helping them to further grow their businesses and boost the economy.”
Kabbage currently supports merchants operating on eBay, Amazon and Yahoo! platforms and over the next six months will add support for merchants operating on or through a variety of other channels including Facebook, Etsy, Shopify and Marketplace at Sears.com.
Gorlin points out that the company has advanced funds to online retailers such as a woman selling refurbished boots and an Atlanta seller of toy trains who does business on eBay and Amazon. “He had a truck coming back from Boston to Atlanta that $15,000 from Kabbage helped him fill for the return trip. “He since doubled his money,” Gorlin says. “Payback to Kabbage has been unbelievably good.”
Kabbage uses automated data sources to analyze the health of an online merchant’s business including transaction history, customer traffic and reviews, and products to deliver working capital within seconds of the merchant’s completed application. With Kabbage’s release of profile building in May, merchants can now proactively add information to their Kabbage account to immediately increase their access to capital.
“Small and medium businesses are the growth engine of the economy and more and more of these businesses are operating online,” said Bryan Stolle, General Partner, Mohr Davidow Ventures. “By using rich, multi-source data and advanced analytics to more fairly and accurately assess business performance, we believe Kabbage’s financial products will enable more businesses to expand inventory, hire new employees, and grow, thereby helping the economy get back on track.”
“There is a rapidly growing delta between small-to-medium businesses’ need for working capital and its availability from traditional sources. The knowledge gained from working with companies like Kabbage helps UPS refine its strategy of enabling global commerce,” said Joe Guerrisi, VP of Corporate Marketing at UPS.
Gorlin said Kabbage wasn’t looking to raise new money, but a number of funds approached the company after seeing what it was doing and the customers and data it was pulling in. “We thought it wise to go ahead and secure the capital now,” he said, “to get into more marketplaces faster.”
He continued, “Not a day goes by when some international company doesn’t contact us.” While Kabbage has yet to fund an international online retailer, the company plans its first several trips abroad in the next six weeks.
In addition to the funding news, the United States Patent & Trademark Office recently granted U.S. Patent No. 7,983,951 to Kabbage, entitled “Apparatus to provide liquid funds in the online auction and marketplace environment.” [Please see today’s announcement “Kabbage Issued U.S. Patent”.]
Friday, February 4th, 2011
By Allan Maurer
Kabbage, (http://www.kabbage.com/) which just planted $6.65 million led by BlueRun Ventures in the bank, is a company with one of those innovative ideas that could not have happened at a better time. The company makes working capital advances via PayPal to qualified online sellers.
Marc Gorlin, chairman of Kabbage, at the 2010 Internet Summit in Raleigh, NC
“There is no faster way to raise working capital on the planet,” says Chairman Marc Gorlin. Out of Beta for a short time, Kabbage has doubled the number of clients it had previously.
It has been making advances of from $2,000 to $12,000 and is going to move up to advances of $25,000 to $40,000 over time, says Gorlin. “If they can get access to capital, they can truly grow their business.”
The alternative method of raising capital offers online sellers another option in one of the worst climates for obtaining small business credit from banks in history.
Kabbage co-founder and COO Kathryn Petralia on the motorized beer cooler the company won at a PayPal X developer conference
This Internet thing is just a fad
“Take a company like Zappos,” says Gorlin. “They were doing $50 million in revenue before they got their first credit line from a bank. Many local companies doing $5 million or $6 million can’t get credit. A company in Minnesota referred to us was selling hardware and had a run rate of $4 million a year from online sales. They went to a bank for money to expand. The bank told them this whole Internet thing is just a fad – and that was this year.”
While traditional bankers want to walk wooden floors and see actual customers, Gorlin points out that “There is actually a ton more data online.”
Using that data, Kabbage qualifies sellers in a matter of minutes from about 200 data points in PayPal and eBay – how long a store has been online, it’s seller rating (which indicates how well they treat their customers), PayPal charge backs, volume of sales and much more. Kabbage has made advances to companies selling everything from American Indian jewelry to model trains, plus size men’s clothing, odd sized men’s shoes, china, and collectibles. “It’s a diverse list,” says Gorlin.
The companies agree to paying back one-sixth of the advance each month via PayPal and can pre-pay with no penalty. Kabbage makes from 6 percent to 16 percent of the advanced amount in fees depending on the firm’s credit history and volume. Down the road, Gorlin sees the possibility of giving online sellers a “Kabbage score” based on its data and increasingly sophisticated analytics. It can, for instance, tell over time which data points may be most predictive of small business success online.
Robert Frohwein, CEO of Kabbage, has been CEO of LAVA Group Inc., an intellectual property investment bank, a founder and the managing partner of Sentry Law Group, and founder of MediaWheel
Hold it while we check your Kabbage score
Banks may eventually use the Kabbage score to open up their own loan coffers, Gorlin suggests. “We could be the means by which banks get more money to small businesses by automating the process for them,” Gorlin notes.
Data analysis Kabbage has done for its own customers shows that “Margins for online businesses are stout. A lot of them won’t sell things for less than a 100 percent margin, they are not paying rent on a store, they don’t have shelf space to fill or need people to talk to customers. They do have different fees on PayPal and eBay, but by and large, the customers we see are running high margin businesses.”
Founded in late 2008 by Gorlin, CEO Rob Frohwein, and Kathryn Petralia, COO, the company attracted high profile investors who include David Bonderman, founder of TPG Capital, Warren Stephens, CEO of Stephens Inc., and the UPS Strategic Enterprise Fund, in addition to BlueRun. The company says the funding will let it expand its financing service beyond eBay merchants to marketplaces such as Amazon, Etsy, Overstock and so on.
Talking to Gorlin, you can tell he gets a kick out of helping small businesses while building his own. Kabbage itself still has a classic startup culture, says Gorlin, a serial entrepreneur who was a co-founder of Pretty Good Privacy (NYSE:MFE), Vertical One Corp. and the Lanta Technology Group.
Startup culture, he says, “Is something you can’t recreate in a big company. You work the number of hours you do to create something out of nothing and you have to burn off some steam.”
So, there are nerf guns. Oh yes, and there is the motorized beer cooler. Kabbage won it as the audience choice prize at a PayPal X developer conference in San Francisco. “I guess you could put something besides beer in it,” says Gorlin, “but I wouldn’t know why.”
On the heels of its funding, Kabbage has already selected larger new offices in Atlanta and will be hiring. It currently employs eight people and expects to hit 15 or so in the next 60 to 90 days. But if you’re going by, watch out for the nerf guns.
Reprinted from our sister publication, TechViewAtlanta.com
Thursday, January 13th, 2011
ATLANTA – Kabbage Inc., a provider of working capital advances for online merchants, has closed on $6.65 million in Series A funding in a round led by BlueRun Ventures.
Additional investors include David Bonderman, founder of TPG Capital, Warren Stephens, CEO of Stephens Inc., and the UPS Strategic Enterprise Fund. The company says the funding will let it expand its financing service beyond eBay merchants to marketplaces such as Amazon, Etsy, Overstock and so on.
Company Chairman and co-founder Marc Gorlin tells us that Kabbage has already selected new offices in Atlanta and will be hiring. It currently employs eight people and expects to hit 15 or so in the next 60 to 90 days.
More than two million U.S. online merchants that collectively generate over $50 billion a year with limited or no access to working capital. Recognizing this challenge, Kabbage recentlylaunched its automated and proprietary system, which enables customers to go from application to cash in their PayPal account in less than ten minutes.
The Kabbage technology platfor provides an analysis of online merchants’ sales and credit history, customer traffic and reviews and prices and inventory compared to competitors – all at Internet velocity. By gaining this insight into business performance, Kabbage says it provides merchants with access to financing options that options to meet their needs in record time.
“There are articles every day on how difficult it is for small businesses to get capital right now. To get them money via paypal in less than ten minutes is unlike anything elses out there today. Banks can’t do it,” Gorlin says.
“The eBay merchants we currently serve use Kabbage working capital to grow their businesses by acquiring inventory, hiring employees, advertising, and purchasing equipment and technology,” said Kabbage CEO, Robert Frohwein. “This round of funding will enable us to expand operations into additional marketplaces, such as Amazon, Etsy, Overstock, etc., helping small businesses to further boost today’s economy.”
Kabbage maintains visibility into the continued operation of its customers through data connections to various marketplaces and other online sources. Once an account holder with Kabbage, customers can gain access to additional working capital by maintaining positive business growth.
Tuesday, March 9th, 2010
ATLANTA – Kabbage, a company that plans to start making loans to online sellers this spring, has nearly completed a $1.5 million equity raise, according to a regulatory filing.
The company says it is dedicated to “providing established online sellers with access to capital they can use to grow their business.”
Kabbage makes loans to online sellers, who often have less access to credit than traditional businesses and are “overlooked by banks and other financial services companies,” the company’s Web site says.
CEO Robert Frohwein told the Atlanta Business Chronicle the company plans to use the money for product development, marketing and workforce expansion.
The company, which revealed the raise in a filing with the U.S. Securiteis and Exchange Commission, is backed by well known Atlanta entrepreneur Tom Noonan. Other investors include Intelligent Systems of Norcross, GA, and Henry Mellon.
Frohwein told the Chronicle that the company expects to start making loans of from $7,500 to $15,000 based on customer sales volumes this spring, financed by an undisclosed bank.
With the number of online sellers on Amazon, eBay, Overstock and other sites constantly increasing and the credit markets tight for traditional businesses, let alone those online, we suspect Kabbage may hit its goal of achieving profitability by next year.
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