Corporates that are expected to exit include e-commerce firm Recruit, financial services firms Santander, ING, Scotiabank telecoms conglomerate SoftBank and logistics services provider UPS.
The acquisition size is undisclosed and covers the company’s workforce, technologies and intellectual property, though not its pre-existing loan portfolio. Some reports suggested American Express would pay up to $850m for Kabbage, lower than its previously reported valuations of the company. Kabbage received $250m from SoftBank in 2017 at a reported valuation above $1.2bn.
Launched in 2009, Kabbage has developed an automated online lending platform that provides small businesses with up to $250,000 in working capital loans to meet short-term needs. Its products are expected to help American Express more effectively cover small businesses’ financial needs.
Kabbage is part of the alternative lending space , which has caught the attention of corporate venturers. The number of deals in this area more than doubled from 20 in 2014 up to 52 in 2019. We have reported 25 corporate-backed rounds so far this year. The fluctuation in total estimated dollars most likely points to how difficult it is to assess the long-term viability of young businesses that have only operated in a low-interest rate environment.
