Goods transportation corporation UPS is extending a debt facility to Kabbage, a US-based company offering working capital in the form of small loans to web startups, as part of an agreement that will enable small business owners to share their shipping history with Kabbage via UPS in order to potentially secure greater capital at lower rates.
The deal follows Kabbage setting up a $12m debt facility with investment firm Western Technology Investment in December.
Kabbage has also raised $25.8m from two separate series B rounds funded by UPS’s Strategic Enterprise Fund, as well as venture capital firms Mohr Davidow Ventures and BlueRun Ventures, and angel investors including co-founder of Square Jim McKelvey and David Bonderman, the founder of investment firm TPG Capital. Kabbage previously pulled in $1.5m in 2010.
Additional investors include early stage investor Intelligent Systems Corp., which contributed to Kabbage’s 2009 seed round, and venture debt firm TriplePoint Ventures.
Launched in 2010, Kabbage’s financing options are useful for online sellers since financial services firms do not tend to account for business models based on virtual commerce. Kabbage tracks merchant activity online and uses the data to craft funding plans to meet the needs of the sellers they serve.
Alan Gershenhorn, chief sales and marketing officer for UPS, said: "Access to working capital for small businesses is fundamental to the country’s economic recovery. This alliance with Kabbage is an example of how UPS and UPS Capital can help small businesses gain access to the working capital they need to grow their business. We’re looking forward to extending our alliance with Kabbage and the thousands of e-commerce companies it supports."