The pioneering online lender Kabbage has raised $135 million in new equity financing, with three large multinational banks among the lead investors, the company announced Wednesday.
The far-flung funding — from the Dutch bank ING, the venture-capital arm of the Spanish bank Santander, and Canada's Scotiabank, among others — underscores the global ambitions of Atlanta-based Kabbage.
Privately held Kabbage was founded in 2009 and soon developed a reputation as a place for U.S. small businesses to get access to cash quickly, though often at a steep price. Last year the firm started offering U.S. consumer loans. The company also licenses its online lending platform to other financial institutions.
In the U.S., banks have been reluctant to adopt Kabbage's technology, but that hesitance has not been a problem in other countries, according to Kathryn Petralia, the firm's head of operations.
"Non-U.S. expansion is happening," Petralia said in an interview. "It's almost out of our control."
She cited a five-month-old partnership with Australia's Kikka Capital, and said that a deal in Europe with a large global bank will be announced soon.
Petralia added that traditional banks in various countries are failing to supply small businesses with the relatively modest loans they need. "Around the world, it's the same exact problem everywhere," she said.
Kabbage plans to spend some of its new equity financing on marketing its own lending businesses, according to Petralia. The company expects to use additional proceeds to invest in new technology that will be used to build partnerships with other financial institutions.
The equity funding round was led by the three multinational banks and Reverence Capital Partners, a private investment firm based in New York. Other new investors include two venture capital firms with foreign ties: Hong Kong-based Yuan Capital and Japanese-owned Recruit Strategic Partners.
Kabbage's hefty fundraising is the latest milepost in the red-hot online lending sphere. In April, Prosper Marketplace announced a $165 million equity financing round. Last month Social Finance said that it raised $1 billion in funding from the Japanese telecom giant SoftBank, while Avant announced a $325 million equity round.
Since it was founded, Kabbage has raised more than $240 million in equity, the company said in a press release. The firm, which has originated more than $1 billion in small-business loans, did not release its current valuation.
Kabbage also said Wednesday that a credit facility it uses to fund its own loans has increased more than threefold to more than $900 million. Investors in the credit facility include insurance companies, hedge funds and pension funds. Kabbage uses the credit facility to securitize its small-business loans.