Merchant Funding-Source Kabbage Obtains $12 Million to Expand
By Ina Steiner
Since last October, online merchants seeking funds to grow their businesses have been able to consider working capital advances from Kabbage in addition to traditional sources such as bank loans. This week Kabbage announced it has obtained $12 million in debt financing from Western Technology Investment (WTI), a private investment firm based in Silicon Valley, to help it expand.
Kabbage uses automated data sources to underwrite its business customers including marketplace and PayPal transaction history, customer traffic and reviews, seller ratings and even social networking data.
In January, Kabbage had raised $6.65 million and raised another $17 million in August to help expand beyond eBay, Amazon and Yahoo Stores and says it now services 10,000 online merchants and is generating more than 35% compounded monthly growth in all of its key metrics.
Western Technology's participation in Kabbage is the first for the firm. Founded in 1980, WTI has provided venture debt to leading companies including Facebook, Google, Palantir, Youku, Brocade Networks, Juniper Networks, InfoSeek, IDEC Pharmaceuticals and Cerent.
Kabbage CEO Rob Frohwein said, "Kabbage and WTI are committed to helping small businesses get the cash they need to buy more inventory, upgrade their systems, market their products and hire more employees."
About the author:
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to email@example.com.
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