Kabbage Inc., an innovate company that offers cash advances to online merchants, announced last week that they’ve received $17 million in funding led by Mohr Davidow Ventures, an investment company. The existing investors include BlueRun Ventures, David Bonderman, founder of TPG Capital, Warren Stephens, CEO of Stephens Inc., and the UPS Strategic Enterprise Fund.
Kabbage, Inc., headquartered in Atlanta, Georgia, is the first business of its type offering cash advances to online businesses. Small to large online sellers seeking funds to grow an online business can potentially benefit greatly from this financial institution.
As of today Kabbage provides funds to sellers operating on eBay, Amazon and Yahoo with a plan to add additional platforms to their fleet such as Facebook, Etsy, Shopify and Marketplace at Sears.com.
“Thousands of online merchants have obtained working capital and grown their businesses since our push into the market in April 2011,” said Rob Frohwein, Kabbage Founder and CEO. “Although small business fuels the majority of growth in the U.S., it is extremely difficult and time consuming for these businesses to apply for and actually receive financing from a traditional bank.”
When a company applies for a cash advance from Kabbage, the application process will pull in the records and analyze a seller’s current online business, including its:
- Transaction History
- Traffic Reports
- PayPal History
“Small and medium businesses are the growth engine of the economy and more and more of these businesses are operating online,” said Bryan Stolle, General Partner, Mohr Davidow Ventures.
Even local brick-and-mortar businesses are opening their doors to the online selling world. They are crazy not to consider it. The small to medium seller is now standing equal in line with the big boys in selling. Cross channel selling on different platforms and building an online reputation now means more than an old-fashioned “credit report” for all involved.
It’s all about growing inventory and bringing on new staff members which in turn helps to bring our economy back into shape.
Another announcement released last week from the Atlanta office was that Kabbage received patent number 7,983,951 from the U.S. Patent Office entitled “Apparatus to provide liquid funds in the online auction and marketplace environment.”
This company is one to watch, as they have sped onto the fast track of rapidly growing online corporations.