SoftBank Invests $ 250 Million in Online Lending Startup Kabbage

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SoftBank Group Corp. invested $ 250 million in online lender Kabbage Inc., the latest in a series of big bets on the tech giant’s mature startups.

Kabbage will use the new funds to expand its small business lending products and, if there is demand, will offer new products like insurance and payroll services. The startup also plans to expand into Asia. Talks with banks in India, China and Japan to license its technology are underway, Kabbage CEO Rob Frohwein said.

He also plans to spend the next 12 months or so positioning the company for a possible IPO. Kabbage expects more than $ 200 million in revenue in 2017, roughly double what he generated in 2015, Frohwein said.

SoftBank has rocked the venture capital industry in recent months by investing billions of dollars in late-stage tech-focused startups, including telecare, robotics, virtual reality and a new farming method. The Kabbage deal strengthens its stake in online lending. SoftBank’s venture capital arm invested in Kabbage in 2014 and SoftBank supported consumer lending site Social Finance Inc. in 2015.

Kabbage employs around 380 people and has already raised around $ 250 million at a $ 1 billion valuation in 2015. Frohwein declined to discuss the new valuation, except to say it was over $ 1 billion.

Kabbage allows small businesses to get loans quickly online and licenses its technology to banks so they can do the same. Founded in 2009 to fill the credit void created by the credit crunch, the Atlanta-based startup is similar to On Deck Capital Inc., Social Finance, LendingClub Corp. and others who use technology to quickly and inexpensively assess creditworthiness and take out loans.

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