Atlanta firm Kabbage, a lender to online merchants, raises $30 million


Atlanta firm Kabbage, a lender to online merchants, raises $30 million

Kabbage, an Atlanta-based company that gives cash advances to online merchants, has raised $30 million from new and existing investors.

The new round of financing now brings the total amount of equity that the company has raised to $56 million since its formation in December 2008.

Kabbage gives cash advances to companies that use online retail sites such as eBay and Amazon to sell their products. Instead of using credit reports, Kabbage analyzes data — including UPS shipping data, the potential recipient’s QuickBooks accounting information and how active the merchant is on Facebook and Twitter — to determine whether to provide money. The online businesses typically use the money for working capital for day-to-day operations.

Kabbage plans to use its $30 million cash infusion for four different things, said Marc Gorlin, the company’s chairman and a co-founder. The company plans to beef up its data and technology operations; expand so it can extend cash advances to small businesses that aren’t solely online; add international merchants; and hire. The company currently has 70 employees.

The company gives cash advances that range between $500 and $50,000. It is testing lines of credit “well over” $100,000, Gorlin said.

“We want to make the process of getting cash fast and painless,” Gorlin said. “Small businesses already have pain associated with getting cash, and many can’t.”

Thomvest Ventures was the lead investor. Kabbage’s existing investors, including the UPS Strategic Enterprise Fund, Mohr Davidow Ventures and BlueRun Ventures also participated.

Kabbage also received money from angel investor SV Angel.

View Comments 0

Weather and Traffic