Kabbage gets $200M from Credit Suisse to expand its AI-based business loans
After picking up $250 million in equity funding from Softbank earlier this year, the small business loans and finance company Kabbage — which uses only algorithms and machine learning (no humans) to determine an applicant’s eligibility — is announcing another big infusion of money. The company is picking up $200 million from Credit Suisse in a revolving credit facility that it will use for loans.
Specifically, Kathryn Petralia, who is the COO and co-founded the company with Rob Frohwein, said the funding will help the company increase the number of loans it can make to larger companies in the US. The average size of those loans will grow to “north of $200,000,” she said.
The money getting announced today brings the total debt funding for Kabbage up to $750 million (with previous tranches coming from the likes of Guggenheim Securities), and it is notable for a couple of reasons.
As Petralia describes it, it’s the largest-ever credit facility provided by Credit Suisseto a loans platform that makes all of its lending decisions based around algorithms and machine learning. To date, the company has served 125,000 customers and made over $3.5 billion in loans by evaluating a myriad of data points related to the company, from accounting details to more lateral information related to its social media profile, location, and line of business.
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