According to the study, ‘Fintech Profile: Kabbage’, major Kabbage has partnered
with SoftBank, Santander, Scotiabank, ING Group,
Thomvest Ventures.
Kabbage is an Atlanta based financial
technology firm. The company aims to provide direct funding to small businesses
and even consumers via an automated funding distribution platform. Rob Frohwein,
Marc Gorlin, and Kathryn Petralia were the founders of Kabbage Inc., which was
set up in 2009 but began operation in 2011. To qualify for a small business
loan, Kabbage has set certain revenue criteria to make it eligible. The minimum
revenue that a business should have is USD 50,000 per annum or USD 4,200 per month
for the last three months.
Kabbage follows a simple process of
dispersing funds to the small and medium enterprises. They initially make sure that the whether the
business is eligible for loan or not. Followed by dispersion of funds and
later, the business can easily use this fund to make payments. Kabbage
functions primarily in two areas of business and these are small business loans
and invoice payments. The small business loans allow very small firms to obtain
loan and expand their business without being restricted by limitations as sent
by traditional loan providers. The small business loan allows business people
to maintain control over their business. For instance if a firm decides to
expand by going public or calling aboard a potential investor, the profits and
decision making authority shall have to be shared with all the partners.
Another benefit small business loans provide is that, the business does not
have to undergo a rigorous qualification process. It prevents mixing of
personal and business relation if a loan is taken from a personal contact.
Mixing personal and business funds can
create problems down the line which can be prevented by small business loans. Kabbage
also allows business people to line up to an amount of USD 250,000 that can be
used by them for their working capital requirement as and when it is needed. The
key USP of Kabbage lies in its ability to process loans for small companies
quickly by assessing their creditworthiness using proprietary technology which
functions on customer data. The data is analyzed within minutes, an interest
rate is set and the funds are dispersed. Another key feature of Kabbage is that
the loan application form can be processed via an Android or an Apple phone
within minutes without involving any cost. Alongside this, business can link
multiple payment options of eBay, PayPal to that allows Kabbage to analyze and
give proper loan guidance. Not only this, Kabbage does not try to overload a
business with funds but allows technology to decide on the amount of funding
that is essential for the business.
In early 2017, Kabbage raised funds from
Softbank to expand its operations and to improve on its technology followed by
funding from Credit Suisse which primarily focused on improving the application
of its Artificial Intelligence technology. Kabbage taps on small and medium
enterprise segment that has been ignored by large banks due to their strict
policy grant loan. The growth potential in this segment is immense and Kabbage
is expected to register high growth in the coming years.
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Ken Research
Ankur Gupta, Head Marketing & Communications
Sales@kenresearch.com
+91-9015378249
Ken Research
Ankur Gupta, Head Marketing & Communications
Sales@kenresearch.com
+91-9015378249
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