Kabbage, which provides working capital to online merchants, is announcing a big deal today. The Atlanta-based startup is debuting a partnership with shipping giant UPS where for the first time ever, they will allow and facilitate customers offering their shipping and transportation data to Kabbage for use in the capital underwriting process.
Kabbage is essentially a way for online merchants and sellers on marketplaces like eBay, Etsy 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. Kabbage makes cash advances available to eBay and other online marketplace sellers fairly quickly and is available in the U.S.
Basically Kabbage will now use UPS data from merchants, including volume and transactional information, to decide whether a merchant qualifies for working capital. The startup says that this is the first time in the almost 130 year history of UPS that they have partnered with a company to share transactional shipping data for something besides tracking packages.
As co-founder Marc Gorlin explains, the data relationship between Kabbage and UPS will enable Kabbage to potentially increase working capital lines based on a small business’ UPS transaction data, which includes information related to the number and frequency of packages shipped.
Additionally, UPS Capital will also offer Kabbage an undisclosed amount of additional debt financing to fund more small businesses who sell online. Kabbage, which currently has a customer base of more than 10,000 e-commerce companies recently raised an additional $12 million in debt financing and $17 million in equity funding.