American Express will acquire the SoftBank, UPS, Santander and Recruit-backed business lender's assets excluding its loan portfolio, for a reported price $350m lower than the valuation for its last round.

US-based business finance provider Kabbage, which counts corporates Recruit, Santander, SoftBank and UPS as investors, agreed to an acquisition by payment processing firm American Express yesterday. The size of the deal was not revealed but it will include the company’s workforce, technologies and intellectual property, though not its pre-existing loan portfolio. A report earlier this month estimated American Express would pay up to $850m for the company. Founded in 2009, Kabbage has built an automated online lending platform that allows small businesses to secure up to $250,000 in working capital loans. The service uses artificial intelligence technology to assess the creditworthiness of each borrower. The platform also offers a business bank account and cash flow visualisation tools, and enables businesses to process online card payments and sell digital gift certificates. Kabbage’s products are expected to help American Express more effectively cover small businesses’ broad range of financial needs. The transaction follows a total of $490m in equity financing for Kabbage, which most recently received $250m from internet and telecommunications conglomerate SoftBank in 2017 at a reported valuation in excess of $1.2bn. Logistics services provider UPS and human resources firm Recruit had contributed to a $135m series E round for the company in 2015 together with financial services firms Santander, ING and Scotiabank at a valuation above $1bn. Reverence Capital Partners led the 2015 round, which also featured BlueRun Ventures, Thomvest Ventures and Yuan Capital, while UPS, Recruit and Santander invested through UPS Strategic Enterprise Fund, Recruit Strategic Partners and Santander InnoVentures respectively. SoftBank led Kabbage’s $50m series D round the year before through its SoftBank Capital unit, investing with UPS Strategic Enterprise Fund, BlueRun Ventures, Mohr Davidow Ventures, TCW/Craton, Lumia Capital and Thomvest Ventures. UPS Strategic Enterprise Fund took part in the company’s $17m series B round in 2011 alongside Mohr Davidow Ventures, BlueRun Ventures and various private investors, having backed a $6.7m series A with BlueRun and assorted individuals earlier the same year. Photo courtesy of Kabbage.

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Thierry Heles

Thierry Heles is the editor of Global University Venturing, host of the Beyond the Breakthrough interview podcast and responsible for the monthly GUV Gazette (sign up here for free).