Softbank Invests $250M in Kabbage’s Small Business Loan Platform


Kabbage, a small business loan platform boasting $3.5B in loans and 115,000 customers, has secured a $250 million loan investment from Softbank. The company’s platform uses an automated system to help determine the customer’s creditworthiness and score.

Kabbage plans to use the investment to expand their operations in the United States and launch additional tools and analytics programs to offer loans for different verticals. The company will also expand into new markets, research acquisitions, add products and enter into the Asia market.

The company has raised $500 million in equity funding, with Softbank’s investment marking the company’s Series F funding round.

The company’s valuation after their Series E funding round in 2015 was $1 billion. The company’s current valuation is estimated to be less than $2 billion, but more than $1.25 billion.

Kabbage was founded in 2009 in Atlanta and was one of the first companies that used big data analytics to help the company monitor loans and provide underwriting. The company’s platform uses hundreds of data points to determine the customer’s ability to take out a loan. The company will use social media profiles, bank accounts, QuickBooks accounts and other sources to determine how much money, if any, in loans will be provided.

The company’s loan business remains profitable, while the company’s platform operation has yet to become profitable.

The company predicts that they will be profitable in Q4 on a GAAP basis.

Kabbage will use the funding round to help personalize their loan offerings further. The company will try and determine, through automation, the differences between businesses and tailor a loan. Restaurants that have different cash flows than a computer repair shop, for example, will be provided a loan that matches their business specifics further.

Kabbage is also interested in the payments sector of the business and is entertaining the idea of a possible new product or acquisition in payments.