Alternative financing startup Kabbageclosed a $700 million asset backed securitization this week. The amount of funding is record-breaking, marking the largest asset-backed securitization by a small business online lending platform to date.
The new transaction, which saw contributions from new and existing investors, brings Kabbage’s total combined debt and equity funding to $2.3 billion and raises its total debt funding to $940 million. The company plans to use the funds to pay down one of its existing asset-backed securitization transactions.
The company’s CFO Scott Rosenberg said, “The new transaction positions the company for continued milestone growth as small businesses accessed more than $2 billion through Kabbage last year and more than $600 million already in the first quarter of 2019.”
Kabbage was founded in 2009 and has since extended more than $6.5 billion in loans to 170,000+ small businesses in the U.S. The company underwrites the loans using non-traditional data, such as shipping records, to originate loans and monitor the business’ improvement to extend more credit, if needed.
In 2018, Kabbage acquired lending platform Orchard to enhance its data analytics capabilities. At FinovateFall 2018, I spoke with Orchard Cofounder David Snitkof, who now serves as Kabbage’s head of data integration and insights, about the integration of the two companies.
Kabbage most recently demoed at FinovateSpring 2015 where it launched the Kabbage Card. The Kabbage Card allows users to withdraw from their line of credit at any point-of-sale where VISA is accepted. Earlier this year, Kabbage announced plans to offer its Pay Later financing program to Alibaba.com’s buyers.
“Recognition as a leading innovator in fintech is tremendous validation for the hard work we’ve done at Marqeta to open the industry up to the possibilities and opportunities of modern card issuing,” company CEO and founder Jason Gardner said. Marqeta is among the 20 companies to make its first appearance on the Forbes Fintech 50 roster.
Also earning their first appearances on Forbes Fintech 50 roster are New York based mobile investment platform Stash and San Francisco supply chain payments innovator Tradeshift.
“Very excited to be included in the 2019 Forbes Fintech 50!,” Stash tweeted once the news was released at the start of the week, “Monday = made.”
“We made the list!” Tradeshift tweeted this morning.
Summarizing this year’s selection of top fintechs, the editors noted that while 19 out of the 50 fintechs featured are unicorns with valuations of more than $1 billion, a nearly equal amount – 20 startups – are making their first showing on Forbes top fintech list. The two areas where newcomers were more prevalent, according to the editors, were payments technology and startups serving the un- and underbanked.
The fintech space is filled with new players bringing to market new innovations and solutions to old business and consumer problems, as well as traditional businesses looking to develop in-house innovation teams and partner with start-ups. But what they both have in common is a desire to meet and exceed changing customer demands, make financial services more accessible and user-friendly, and keep up with the fast-paced technological advances. During FinovateFall, we sat down with the experts on the ground to ask them about what’s driving the fintech ecosystem where they work.
Andrew Boyajian, Head of Banking, North America, Transferwise on overcoming regulatory challenges to launch a global product.
Neeraj Arora, Global Head of Decision Science and Data Automation – Personal Insurance at AIG on the importance of an innovation branch in the business and why they should work hand-in-hand with start-ups.
David Snitkof, Head of Data Integration & Insights at Kabbage discusses leveraging data and why it should be more than just plugging in some numbers to get an output.
Christian Zimmerman, Co-founder & CEO, Qoins on the pain points which lead him to Qoins and what the future has in-store for crowd-funding to pay back loans.
Alyson Clarke, Principal Analyst, Forrester on the three components for a quality customer experience.