Santander InnoVentures, ING and Scotiabank have joined a $135 million investment round in automated lending platform Kabbage.
The round, led by Reverence Capital Partners, brings the Atlanta-based company’s total equity raised to date to over $240 million. Kabbage also announced a threefold expansion of its credit facility to more than $900 million.
Kabbage uses data generated through business activity such as accounting data, online sales, shipping and dozens of other sources to provide fully automated funding to small businesses in minutes. The company currently provides over $1 billion annually to small businesses and consumers, through its consumer loans platform Karrot, just four years after its launch.
The involvement of three banks in the latest round of funding marks a recognition of the potential for new data-driven startups to alter the lending landscape to the detriment of the traditional banking industry.
Ralph Hamers, CEO of ING, says that in addition to the bank’s equity participation in Kabbage, the companies are exploring cooperation in the field of SME lending. Announcements on the cooperation are expected shortly.
“The transaction is in line with ING’s strategic priority to increase the pace of innovation and to serve changing customer needs by working with both dedicated internal teams and with outside partners and startups,” he adds.
For Santander, the investment represents a second big bet on the future of finance in a week, following its recent $4 million funding of distributed ledger outfit Ripple.
Rob Frohwein, Kabbage co-founder and chief executive officer, comments: “It is particularly gratifying to welcome three of the top fifty global banks to our shareholder base as we continue to expand our reach internationally, delivering an unparalleled experience to small businesses and consumers worldwide.”