A week after acquisition talks began, the New York-based multinational financial services corporation, American Express, finally announced that it had entered into an agreement to acquire substantially all of the fintech company, Kabbage, in an effort to expand its services to small businesses.
This includes a full suite of financial technology products, data platform as well as IP built for small businesses, and excluding Kabbage’s pre-existing loan portfolio, according to the official press release.
Following the latest development, Kabbage CEO and co-founder, Rob Frohwein commented
“At Kabbage, we have always made the success of America’s small businesses our primary objective. We have built a technology and data platform that provides them with the kind of capabilities and insights often reserved for larger businesses. By joining American Express, we can help more small businesses succeed with a fully digital suite of financial products to help them run and grow their companies.”
The Atlanta-based Kabbage products, backed by investors including SoftBank Group Corp. ‘s Vision Fund and Reverence Capital Partners, include access to flexible credit lines, online bill payment, cash flow visualization tools, e-gift certificates. Other financial details of the deal have not yet been disclosed, but reports suggest that the numbers could be as high as $850 million.
This comes at a time of severe distress among the SMBs amid the COVID-19 pandemic. Kabbage was founded to provide quick funding to small businesses more than a decade ago and the news of its acquisition by the credit-card giant did not sit well with many commentators in the space.
Anna Marrs, the President of Global Commercial Services at AmEx, had recently asserted,
“For several years, American Express has been expanding beyond our industry-leading commercial card products to offer our business customers a growing set of payment and working capital solutions. This acquisition accelerates our plans to offer U.S. small businesses an easy and efficient way to manage their payments and cash flow digitally in one place, which is more critical than ever in today’s environment.”