/// Kabbage Closes on $17 Million Round to Help Online Merchants Grow
Kabbage has raised $17 million in a second round of funding to help small online merchants obtain working capital. The Atlanta-based company, which says the word “cabbage” sometimes means “money,” provides cash advances to online merchants who typically have a hard time getting attention from traditional lenders. Kabbage currently lends to merchants operating on eBay, Amazon and Yahoo, and plans to use the round to expand supports more channels over the next six months, such as Facebook, Etsy, Shopify and Sears.com. The round was led by Mohr Davidow Ventures with participating from existing investors Blue Run Ventures and other individuals, including Jim Mckelvey, the co-founder of Square. Since launching in April, it says “thousands of online merchants” have obtained working capital, and that on average, it advances about $10,000 per request, although it can lend as much as $40,000. A merchant’s annual revenues may range from $15,000 to $7 million. It charges from 3 percent to 18 percent, depending on the merchant’s risk factors and the length of time for payback. In addition to supporting merchants on additional marketplaces, Kabbage said it will use the investment to seek distribution relationships, develop new financial products and expand internationally. Like the online merchants it works with, Kabbage works entirely over the Internet. It automatically analyzes the risk factors in lending to an online merchant and delivers the cash advance to the merchant using PayPal.
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Kabbage Closes on $17 Million Round to Help Online Merchants Grow