2019 Disruptor 50: No. 14 Kabbage

Small Business

Founders: Rob Frohwein (CEO), Kathryn Petralia (President), Marc Gorlin
Launched: 2009
Headquarters: Atlanta
$489 million
Valuation: $1.2 billion (PitchBook)
Key technologies:
Artificial intelligence, cloud computing, machine learning
Credit, financial services, lending

Small businesses are continuously touted as the lifeblood of the U.S. economy, but it doesn’t seem like the big banks know that. Getting a loan from any of the majors remains a struggle — and that’s where Kabbage comes in. The Atlanta-based online lending platform for small businesses was started in 2009 in the aftermath of the financial meltdown, when getting a bank loan was particularly stressful for smaller firms.

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Kabbage claims that in three steps — and in under 10 minutes — a small business can apply and be approved for a credit line of up to $250,000. The company is able to do this because it’s built the machine-learning algorithms that allow it to pull real-time business data of customers rather than rely on traditional bank statements and other static financial documents.

Last year Kabbage funded more than $2 billion to small businesses — one third of its total funding since 2011. It now lends about $10 million a day to customers with rates that range from 1.5% to 10%, depending on the performance factors of the business that are evaluated.

In January, Kabbage partnered with Chinese e-commerce giant Alibaba on a program called Pay Later. It allows U.S. small businesses on Alibaba.com to access up to $150,000 of financing for their orders. The fintech has raised $2.3 billion in funding so far from SoftBank, Santander Bank and others, including a $700 million debt round in April.

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