The great fintech consolidation of 2020 continues. While we knew this deal might be coming, as it was leaked last week, today they made it official. Kabbage is being acquired by American Express for an undisclosed sum, although last week the rumor was that it would be “up to $850 million.”
In a letter the founders of Kabbage, Rob Frohwein and Kathryn Petralia, shared today they had this to say about the deal:
Although this is our first time sitting in the seat of the entrepreneurs selling their “baby,” we are certain it’s not uncommon to have a bittersweet feeling. On the one hand, we are entrepreneurs through and through and relish the daily fight that is required to push a company forward (not to mention through a pandemic). On the other hand, we are not joining just any company, but a company we have long admired that shares our vision to strengthen small businesses.
Importantly, we’re integrating with an incredible team. We’ve known Anna Marrs, the spectacular and authentic leader of the Global Commercial Services division of American Express, long before we started this particular conversation. The same goes for Steve Squeri, the CEO of American Express, who is not just a widely respected CEO but a genuinely nice, down to earth guy. We are joining an illustrious company of exceptional people and that is what makes us so excited about this transaction.
Kabbage has expanded beyond lending in recent years with the launch of Kabbage Payments, Kabbage Insights and just last month Kabbage Checking. They now have a chance to integrate these offerings into the vast Amex empire.
Interestingly, according to the press release AmEx will acquire the technology, people and data of Kabbage, but not its loan book. Given the state of small business today and the uncertainty over the potential outcome of the loans AmEx is taking that potential downside risk off the table.
Anna Marrs, President of Global Commercial Services at American Express, said this in an official statement: [Read more…]