Kabbage is a company that offers capital for online merchants including Amazon.com, eBay, and Etsy. Many of these merchants may not qualify for a bank loan so this offers a great alternative. Kabbage announced that they have received $75 million in debt financing led by Victory Park Capital (VPC). Existing equity investor Thomvest Ventures also participated in the debt financing. The debt will be used for funding advances for the company’s customer base.
Before offering a loan to merchants, Kabbage checks their sales history, credit history, customer traffic, prices, inventory, and reviews. After conducting due diligence on the merchant, Kabbage can provide funding to business in as little as seven minutes. Kabbage recently expanded to the United Kingdom.
“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,” stated Kabbage co-founder and CEO Rob Frohwein. “We are proud to have developed a new asset class that allows institutional investors to fund the growth of the small businesses that are the backbone of our economy.”
Kabbage raised the new debt funding due to massive growth that the company has seen in the last few months. Kabbage has extended over 60,000 advances thus far with nearly 40,000 in 2012. The company expects to hit 100,000 advances in 2013. Advances by volume have grown 298% on a year-over-year basis.