Atlantic fintech Kabbage raising $150M at $875M valuation

Financial technology provider  is raising a massive $150 million investment at a valuation that has the Atlanta company flirting with “unicorn” status.

The Series E raise values 6-year-old Kabbage at $875 million post-money and about $750 million pre-money, sources said. That nose-bleed valuation puts Kabbage just shy of “unicorn” status, a Silicon Valley term bestowed on companies worth $1 billion, or more. Nach meiner lehre zur reiseverkehrskauffrau und einem wirtschafts- und sozialgeographiestudium, das ich mit diplom abgeschlossen habe, machte ich mich mit einem der essay spezialreisebro selbststndig.

Kabbage is is among a growing coterie of technology-powered alternative lenders fueling the wave of entrepreneurship. The company is on a growth spurt with plans to add about 100 jobs over the next year and more than double its office footprint.

Kabbage has raised about $120 million of the Series E, with a closing expected “in a few weeks,” a source said.

New investors include Spain’s Santander Bank and Indian and Chinese private equity firms. Existing investors UPS’ Strategic Enterprise Fund, BlueRun Ventures and Thomvest Ventures also participated.

Kabbage CEO  declined comment.

Kabbage uses automation and analytics to provide short-term working capital to small and mid-sized businesses, who are often turned away by financial institutions who are either risk-averse or unable to profitably write five-figure loans.

“There is a dearth of technology in small business funding,” Kabbage co-founder told Atlanta Business Chronicle in June. “Automating the process is not only faster, it is less hassle. ”

The Atlanta company plays in a crowded market with several deep-pocketed competitors, including Prosper, and OnDeckCapital Inc. In April, Funding Circle Ltd. raised $150 million from venture investors in a round that reportedly valued that company at more than $1 billion, according to the Wall Street Journal.

, which has raised $106 million so far, is financially backed by SoftBank Capital, UPS’ Strategic Enterprise Fund, BlueRun Ventures, Mohr Davidow Ventures and Thomvest Ventures.

CEO Frohwein hinted at the current fundraising in June. “When you’re in the money business, you always need inventory,” he said at the time. “A raise is likely. ”

Kabbage, which was founded in 2009 and launched its service fully in 2011, began by serving a market overlooked by traditional banks and financial institutions — online merchants who relied on short-term loans to buy inventory that they would then sell on eBay, Amazon, and Etsy.

Kabbage has since broadened its customer market, now financing brick-and-mortar business, such as restaurants and dry cleaners. These merchants now account for about 70 percent of Kabbage’s customer base.

Kabbage also licenses its technology and monitoring service to its would-be competitors — financial institutions who use Kabbage’s software to serve their SMB customers.

A surging economy is driving loan applications — which are up about 200 percent year-over-year.

“Businesses have more opportunity to grow, and they have more customers,” Petralia said. “So, they need to invest in inventory, equipment or marketing to scale to meet demand. ”

As it scales, Kabbage will increase its 230-employee workforce by about 50 percent. To keep pace, Kabbage will need to expand its real estate footprint.

The company, which occupies 18,000 square feet at 730 Peachtree St,, will need up to 40,000 square feet in the next four-to-six months.

Read the full article

.