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Think $30 million is a lot to pay for produce? Not when it gives money back. Kabbage, which gives loans to online sellers, got $30 million in funding today, led by Thomvest Ventures.
Kabbage will give cash advances to small online merchants that need extra capital to pay employees, product products, get office space, and the myriad of other things businesses do to get bigger. In order to get an advance from Kabbage, you must be selling products via eBay, Amazon, Yahoo Stores, Etsy, Shopify, Magento, or using PayPal to process payments. When you apply for an account, the company’s technology will look at your seller history and determine whether you are approved for the capital and how much.
From there, Kabbage will put your cash advance directly into your business’ PayPal account. Seller pay Kabbage back over six months. Each month Kabbage takes a sixth of loan amount adds on an extra fee, which is to be paid by the seller. This fee can range between two and seven percent of the over advance. After the first two months, the fee goes down to a set one percent.
Kabbage received its first round of funding in August 2011, totaling at $17 million. The round was led by Mohr Davidow Ventures. This round was led by Thomvest Ventures with participation from existing investors Mohr Davidow Ventures, BlueRun Ventures, UPS Strategic Enterprise Fund, and individuals Warren Stephens, and David Bonderman.
Thus far the Atlanta company has taken on a total of $56 million in funding.