SoftBank Invests $250 Million in Equity in Kabbage: Largest Ever for SME Online Lender

Kabbage is out with some big news. SoftBank has committed $250 million in an equity investment into the online lender. This is a significant statement on the belief that Kabbage is on the right trajectory when it comes to the competitive online lending market. SoftBank is known for taking big positions and has recently been quite active in the Fintech space. The investment by SoftBank is said to be the largest ever in the SME online lending sector.

Rob Frohwein, co-founder and CEO of Kabbage, released a statement on the announcement;

“Our partnership with SoftBank accelerates our goal of providing a suite of services to small businesses globally that is centered on real-time and persistent access to a wide variety of data. SoftBank’s scale, global reach, relationships and unparalleled expertise in building transformative industry leaders make them an ideal partner for Kabbage.”

SoftBank Managing Director David Thevenon stated;

“SoftBank invests in market-leading companies that dramatically improve the customer experience and expand markets through breakthrough technology and data capabilities. We invested in Kabbage because their unique automated lending platform leverages open data networks and best positions them to empower small businesses around the world.”

Having SoftBank as an investor and a resource bodes well for Kabbage’s global aspirations. Kabbage said it will expand its lending products for small businesses and will explore non-lending products and services for these customers as it diversifies its portfolio of services. Kabbage will also use the funds to accelerate its SaaS platform business that powers online SMB lending for global banks indicating it is accelerating its partnership program. Kabbage currently operates in North America and Europe and plans to expand into Asia which is no small task. Having SoftBank in their corner will help.

Kabbage shared several bullets on platform accomplishments to date:

  • Developing the first and only fully automated underwriting and ongoing monitoring platform.
  • Providing nearly $3.5 billion in funding to small businesses.
  • Serving more than 100,000 small businesses – more than any other online small business lender.
  • Maintaining 1.5 million live connections to customer data.
  • Powering automated lending for three of the world’s top 50 global banks by asset size: ING, Santander and Scotiabank.
  • Receiving industry awards for innovation, including: Forbes (America’s Most Promising Companies, FinTech 50), CB Insights (Fintech 250), CNBC (Disruptor 50), Inc. 500 (America’s Fastest-Growing Private Companies) and Fast Company (Most Innovative Companies in Finance).

The closing of the investment is subject to regulatory and other customary closing conditions and is expected to be completed in Q3 of 2017.

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