Atlanta-based startup Kabbage, which provides working capital to online merchants, has closed $12 million in debt financing from Western Technology Investment. In August, Kabbage raised $17 million from BlueRun Ventures, David Bonderman, founder of TPG Capital; Warren Stephens, CEO of Stephens; the UPS Strategic Enterprise Fund, Jim McKelvey, co-founder of Square; and others.
Kabbage, which was founded by Marc Gorlin, Rob Frohwein and Kathryn Petralia, is essentially a way for online merchants and sellers on marketplaces like eBay and Amazon to get capital they otherwise wouldn’t qualify for at a bank. Kabbage uses technology to analyze online merchants’ sales and credit history; customer traffic and reviews; and prices and inventory compared to competitors. And merchants can proactively add information to their Kabbage account to immediately increase their access to capital.
Via PayPal’s Adaptive Payments API, Kabbage makes cash advances available to eBay and other online marketplace sellers fairly quickly (Kabbage says that many transactions take as little has ten minutes). Kabbage is currently available only to U.S. businesses.
The new financing will allow Kabbage to expand the working capital available to its customer base of more than 10,000 e-commerce companies.