American Express acquires SoftBank-backed Kabbage
American Express (Amex) is acquiring SoftBank-backed small business loan platform, Kabbage.
The financial terms of the deal are not being disclosed. However, reports earlier this month put the value of the acquisition at up to $850 million.
Kabbage had raised nearly $990 billion in debt and equity (and at least $3.5 billion in securitisations). It was valued at over $1.2 billion in its last equity round of $250 million, in 2017, led by SoftBank.
Kabbage’s pre-existing loan portfolio is not included in the purchase agreement.
Under the terms of the agreement, Amex will acquire Kabbage’s team and its full suite of financial technology products, data platform and IP built for small businesses.
Kabbage’s products include: access to flexible lines of credit, online bill payment, cash flow visualisation tools, e-gift certificates, and the ability to centralise funds through the company’s recently launched business checking account.
This product suite is integrated into a single online platform that uses real-time data processing to help small businesses better understand, forecast and manage their cash flow.
Amex plans to offer a broader set of cash flow management tools and working capital products to its small business customers in the US through Kabbage.
“This acquisition accelerates our plans to offer US small businesses an easy and efficient way to manage their payments and cash flow digitally in one place, which is more critical than ever in today’s environment,” says Anna Marrs, president of global commercial services at Amex.
“By bringing together Kabbage’s innovative technology and talented team with our broad distribution capabilities and over 60 years of experience backing small businesses, we can better help our customers successfully emerge from this challenging period and beyond.”
Kabbage CEO and co-founder, Rob Frohwein expresses his excitement at joining Amex. “By joining American Express, we can help more small businesses succeed with a fully digital suite of financial products to help them run and grow their companies.”
The acquisition is expected to close later this year, subject to customary closing conditions.