AmEx To Buy Alt Lender Kabbage

American Express has inked a deal to buy “substantially all” of small business cash flow management company Kabbage. The deal is forecast to close later in 2020, “subject to customary closing conditions,” according to a Monday (Aug. 17) announcement.

“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,” American Express President of Global Commercial Services Anna Marrs said in the announcement. “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.”

American Express would acquire the team of the FinTech along with its complete suite of FinTech offerings, IP and data technology. The offerings of Kabbage encompass access to flexible lines of credit, technology to visualize cash flows, digital bill payment, ability to centralized funds via a business checking account, and electronic gift certificates.

These products are linked into one digital platform that harnesses real-time information processing to assist small firms in better making sense of, planning and handling their cash flow.

“At Kabbage, we have always made the success of America’s small businesses our primary objective,” Kabbage CEO and Co-Founder Rob Frohwein said in the announcement. “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.”

In July, news surfaced that Kabbage had launched Kabbage Checking, which will help small and medium-sized businesses (SMBs) use online banking offerings such as bill payments and electronic wallets per news at the time.

Kathryn Petralia, president of Kabbage, said at the firm that the firm had already assisted 225,000 SMBs access services that are typically only available for bigger corporations.