Online merchant lender Kabbage raises $17 million

Kabbage Inc., an Atlanta-based lender to online merchants, announced that it has raised $17 million from a group of investors.

The funds will be used to "pursue additional marketplaces, distribution relationships, financial products and international expansion," the company said.

Kabbage analyzes the business data of online merchants who apply for loans, including their transaction history, customer traffic and reviews, and products, and it uses the data to determine whether to make them cash advances.

Rob Frohwein, Kabbage's founder and CEO, said, "It is extremely difficult and time-consuming for these businesses to apply for small business loans, not to mention actually getting access to funds from a traditional bank." He said Kabbage, which was founded in 2008, fills the void.

The company currently supports merchants operating on eBay, Amazon and Yahoo, and it plans to support merchants on channels including Facebook, Etsy, Shopify and Marketplace at Sears.com.

Funding was led by Mohr Davidow Ventures, an early stage venture capital firm that has $2 billion under management.

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