A well-known fact for small merchants using sales channels such as eBay, Amazon, and Yahoo is that working capital is required. The sellers can’t make more money without having some up-front cash in a PayPal account. Kabbage is the company that comes to their rescue. Now, Kabbage itself has raised $17,000,000 of funding from institutions and angel investors.
After conducting a background check, Kabbage provides working capital to small merchants operating online. In return, Kabbage charges a fee of 6 to 16 percent of the cash advance, depending upon the time period for repayment by the online seller.
The company’s evaluation process examines current online sales data of an internet merchant to assess the quality of the applicant for a working capital advance from Kabbage. This permits fast approval of merchants, who do not have sufficient time to apply for funding that follows a traditional bank analysis path. Part of the service provided by Kabbage is automated data sources for analyzing online transaction history, customer traffic, and product reviews.
Kabbage was founded in Atlanta in 2008 and first provided merchant funding in April 2011. The company just patented a process for providing liquidity in the online auction and internet marketing environment. In coming months, Kabbage plans to provide support for merchants operating on Facebook, Etsy, Shopify, and Marketplace at Sears.com.
Kabbage previously raised $6,650,000 in January 2011 and $2,000,000 in 2009 seed funding from angel investors.