Magazine article American Banker

Three Big Banks Lead $135M Investment in Kabbage

Magazine article American Banker

Three Big Banks Lead $135M Investment in Kabbage

Article excerpt

Byline: Kevin Wack

The pioneering online lender Kabbage has raised $135 million in new equity financing, with three large multinational banks among the lead investors, the company announced Wednesday.

The far-flung funding -- from the Dutch bank ING, the venture-capital arm of the Spanish bank Santander, and Canada's Scotiabank, among others -- underscores the global ambitions of Atlanta-based Kabbage.

Privately held Kabbage was founded in 2009 and soon developed a reputation as a place for U.S. small businesses to get access to cash quickly, though often at a steep price. Last year the firm started offering U.S. consumer loans. The company also licenses its online lending platform to other financial institutions.

In the U.S., banks have been reluctant to adopt Kabbage's technology, but that hesitance has not been a problem in other countries, according to Kathryn Petralia, the firm's head of operations.

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"Non-U.S. expansion is happening," Petralia said in an interview. "It's almost out of our control."

She cited a five-month-old partnership with Australia's Kikka Capital, and said that a deal in Europe with a large global bank will be announced soon.

Petralia added that traditional banks in various countries are failing to supply small businesses with the relatively modest loans they need. …

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