Innovation That Matters

Funding service targets eBay merchants

Financial Services

All businesses need capital to grow, and that includes online merchants. Yet such e-commerce vendors are underserved by the financial services industry because traditional underwriting and funding criteria do not account for a virtual commerce business model or the value of recently sold inventory. So believes Atlanta-based Kabbage, which recently launched a new funding service that targets eBay merchants specifically. Online vendors begin with Kabbage by entering their eBay marketplace ID. Using that, Kabbage checks their activity and history on the marketplace; if both are sufficient, it asks the retailer to complete an application. That application is far briefer than most because Kabbage learns much of what it needs about the retailer — including sales and credit history, customer traffic and reviews, and competitive information — via online data, which it can access in seconds with the applicant’s permission. Kabbage then makes an immediate decision; if approved, the borrower can access funds immediately via PayPal. In general, Kabbage releases funds as the retailer lists more products for sale, thus ensuring that cash flow needs are always met. Kabbage currently serves only eBay sellers based in the U.S., but it aims to add other marketplaces soon, and ultimately to expand internationally. One to partner with or emulate in your neck of the e-commerce woods…? (Related: Visa donates $1M to Kiva for U.S. microloans.)



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