The city is broadening the reach of its 9% “amusement tax” to include streaming entertainment services like Netflix and Spotify.
Kabbage provides small loans to retailers that sell via online marketplaces.
Kabbage Inc., which provides cash advances to small and medium-sized merchants that sell on online marketplaces, said this week it had raised $17 million in new capital, the company’s second round of fundraising.
Merchants use the money to buy inventory. They must pay back the loans within six months and pay fees that depend on retailers’ selling history and credit information. The fees range from 3% to 7% if paid back within 30 days and 10% and 18% if paid back within six months. Russell Walraven, Kabbage’s director of marketing, says the company has received thousands of financing requests and has doled out millions in advances, which average about $8,000 each.
Kabbage will use the funding to expand its financing service to such venues as Facebook, Etsy, Shopify and Sears, as well as develop new financial products and expand outside the United States, Walraven says. The company also plans to begin offering loans to retailers who sell on their own web sites; Kabbage hopes to launch that service within a year. “The goal is to work with retailers, no matter where they sell their products,” Walraven says. “As long as we can get the data we require, we’ll be able to work with these merchants.”
Kabbage also says has secured a patent for the formula it uses to determine which retailers receive funds. Instead of relying on FICO scores and other credit ratings, Kabbage’s formula determines merchants’ health by analyzing products, transaction history, customer traffic and reviews. Retailers can create a profile on Kabbage.com, submit an application for funds and receive a decision within 30 seconds, Kabbage says. If approved, retailers will be funded immediately through PayPal.
“By using rich, multi-source data and advanced analytics to more fairly and accurately assess business performance, we believe Kabbage’s financial products will enable more businesses to expand inventory, hire new employees, and grow, thereby helping the economy get back on track,” says Bryan Stolle, general partner at Mohr Davidow Ventures, which led the funding round.