Kabbage, Inc. is a financial services company based in Atlanta, Georgia, and formed for the purpose of financing technology and data online. One of the unique aspects of Kabbage is that it streamlined the lengthy, manual loan application process to one that is 100% online and automated. Applicants use their own data to apply and receive an immediate response to their application.
Kabbage began in 2009 under its current CEO, Rob Frohwein, Chairman Marc Gorlin, and COO Kathryn Petralia. Their idea was to develop a finance service data and technology platform to fund small businesses. The service uses data from accounting software, payment processors, UPS shipping data, and business checking accounts, as well as larger e-commerce sites such as Etsy, Shopify, eBay, and Amazon to solicit small businesses needing loans.
To date, Kabbage numbers tens of thousands of customers. A measure of its success is the fact that 80% of its business is comprised of repeat customers.
The typical advance from Kabbage is from $500 – $100,000, depending on determining factors, such as business volume, transaction volume, social media use, amount of time company has been in business, and the seller’s credit score. Kabbage developed its own program, dubbed Social Klimbing, to generate a Kabbage Skore for its customers. This is used as a social media credit score. The customer uses advances for inventory, upgrades, and marketing.
In 2014 Kabbage employed its platform to start up Karrot personal loans, the only completely automated personal loan technology able to verify 100% of an individual’s income. Like Kabbage, Karrot provides an immediate response, and access to funds is usually within one business day.
Kabbage is venture-funded and backed by Morh Davidow Ventures, Thomvest Ventures, and BlueRun Ventures, and according to its last round of funding had raised more than $56 million. Its debt is funded by Victory Park Capital. In April of 2014 Kabbage closed a $270 million credit facility from Guggenheim Securities, banking and capital markets division of Guggenheim Partners.
Kabbage and UPS entered into an agreement to allow small businesses to direct UPS to share their shipping history with Kabbage, giving Kabbage access to records of the entire volume of shipping their customers utilize. Kabbage does not access records for offline or mail order, however, and this larger volume facilitates the process of gaining more capital at lower rates for Kabbage customers. Kabbage has a similar partnership with QuickBooks, enabling those users to acquire Kabbage Cash.
Kabbage was a Red Herring 100 North American Winner in 2012, recognized as one of the top private companies in the Americas. This award identifies companies who develop sustainable, long-term innovations.
Also in 2012, Kabbage was elected as one of the Most Innovative Companies by PYMNTS.com.
Kabbage won the VentureBeat Cloudbeat Innovation Showdown, and in 2013, Fast Company picked Kabbage as one of the Top 10 Most Innovative Companies in Finance, along with PayPal and Square. In January, 2014, Kabbage was named by Forbes Magazine as one of its Top 100 Most Promising Companies.