SoftBank Returns To Online Lending With Kabbage Investment

Japanese telecommunications giant SoftBank has invested $250 million in Kabbage Inc, an online lending company based in Atlanta, Georgia, providing funding to small enterprises through its automated lending system. The latest move by SoftBank marks the company’s growing interest in the online lending segment, which is one of the financial services industry’s rapidly expanding sections. In 2014, SoftBank, along with other investors, also invested $106 million in Kabbage, helping to further raise the online lender’s funding accumulated from previous rounds of financing. According to a report from Bloomberg, Kabbage plans to bring its online lending services to Asia using the latest funding provided by SoftBank, as discussions to have its lending platform licensed in China, India, and Japan are already ongoing, according to Kabbage Chief Executive Officer Rob Frohwein.

Founded in 2009, the financial services platform works to assess the data points of loan applicants and uses its results to decide whether to proceed with the underwriting and funding process. The company’s line of credit is up to $150,000, which depends on various factors including business age and size, transaction volume, and the borrower’s credit score. Once approved, the borrower has up to 12 months to pay off the loan, which is provided via a PayPal transfer or direct deposit to the customer’s bank account. In November 2012, Kabbage officially made inroads in the mobile space with the launch of its app for Android and iOS devices.

On top of its new plan for expansion, Kabbage also aims to file for an initial public offering after a year, according to Frohwein. SoftBank’s latest investment beefs up Kabbage’s opportunity to fulfill its IPO push and expand the company’s offerings that cater to small businesses. Kabbage is just one of many companies SoftBank has invested in over the past couple of months. Most recently, the company invested in robot vacuum firm iRobot, taking a small stake in its operations, though the exact amount of that investment remains unknown. Earlier this year, it was reported that SoftBank was to invest $1 billion in WeWork, a shared workspace services provider. All of its recent moves in the United States are backed by a $93 billion Vision Fund that the conglomerate established this spring.

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Manny Reyes

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A big fan of Android since its launch in 2008. Since then, I've never laid my eyes on other platforms.