American Express says it has entered into an agreement to acquire substantially all of Kabbage, a financial technology company providing cash flow management solutions to small businesses in the US.
The transaction represents an important step toward American Express’ goal of being an essential partner to small businesses through a broad range of payment, cash flow and financial management tools.
The financial terms of the deal are not being disclosed, but reports earlier this month put the value of the acquisition at up to $850 million. For some context, Kabbage had raised nearly $990 billion in debt and equity (and at least $3.5 billion in securitizations), and was valued at over $1.2 billion in its last equity round of $250 million, in 2017, led by SoftBank.
Under the terms of the agreement, American Express will acquire Kabbage’s team and its full suite of financial technology products, data platform and IP built for small businesses. Kabbage’s products include access to flexible lines of credit, online bill payment, cash flow visualisation tools, e-gift certificates, and the ability to centralise funds through the company’s recently launched business checking account.
“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,” said Anna Marrs, President of Global Commercial Services at American Express.
“This acquisition accelerates our plans to offer US 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.”
The acquisition is expected to close later this year, subject to customary closing conditions. Kabbage’s pre-existing loan portfolio is not included in the purchase agreement.