Kabbage, an online provider of working capital for small businesses, said Wednesday that it closed a revolving, three-year, $270 million securitization of receivables on merchant cash advances.
Merchant cash advance providers offer businesses a lump sum payment in exchange for a share of future sales. Kabbage has advanced over $250 million to small businesses in fewer than three years in operation.
Guggenheim Securities acted as sole structuring and placement agent on the deal.
“This inaugural debt financing for Kabbage represents the first securitization of MCA and related products to be distributed to capital markets investors,” said Matthew Perkins, senior managing director and head of ABS and RMBS banking at Guggenheim Securities, said in a press release.
Pricing was not disclosed.
Top-tier institutional investors participated in the oversubscribed, initial debt round. Their participation, said Perkins, reflects investors’ confidence in Kabbage’s proprietary and automated underwriting data platform, as well as their interest in small business funding as an asset class.
Kabbage publicly launched in May 2011. The securitization comes one year after it obtained a $75 million credit facility from one of its private equity sponsors, Thomvest Ventures, and another private equity firm, Victory Park Capital, in April 2013.
In addition to Thomvest Ventures, Kabbage is owned by Mohr Davidow Ventures, BlueRun Ventures, the UPS Strategic Enterprise Fund, with additional investors including: Ron Conway’s SV Angel; David Bonderman, founder of TPG Capital; Warren Stephens, CEO of Stephens Inc.; Western Technology Investment; H. Barton Asset Management; and TriplePoint Ventures.