Small business lender Kabbage is growing its reach with e-commerce buyers and sellers, including a partnership with GoDaddy that puts the Kabbage platform in front of GoDaddy’s 19 million entrepreneurs.
The partnership with GoDaddy, which launched earlier this month, is a play to reach e-commerce businesses that partner with GoDaddy. GoDaddy is a domain name and marketing service for small businesses, and it positions itself as a one-stop shop for businesses looking to scale.
With GoDaddy, Kabbage is augmenting its outreach to e-commerce businesses who otherwise would have difficulties getting loans from banks. “We’re always looking for ways to distribute our product that are efficient,” said Laura Goldberg, chief revenue officer at Kabbage. “You want to go where small businesses are.”
The GoDaddy tie-up is not the first time Kabbage has sought to reach new customers on e-commerce platforms. In January, the company partnered with business-to-business e-commerce platform Alibaba.com to launch point-of-sale financing tool Pay Later.
Beyond web and domain name services, GoDaddy offers an e-commerce toolkit called Websites + Marketing. The service helps companies manage their orders, including payments and shipping, from online marketplaces like Amazon, eBay and Walmart. According to Goldberg, companies that are using GoDaddy’s e-commerce consulting services are rapidly growing businesses.
“Maybe they’ve investing in Google adwords, maybe they’re going to stock up on inventory [or] maybe they’re going to open a second location,” she said. As these businesses grow, loans are a logical next step.
Kabbage’s product will show up when businesses are signing up for any GoDaddy website or marketing product through a unified login. GoDaddy will also let companies know about Kabbage’s services through marketing channels like email and social media.
Kabbage isn’t the only small business lending platform trying to reach companies on e-commerce platforms. SellersFunding, Square Capital, PayPal Working Capital and Amazon Lending are all trying to reach small businesses growing their online presence.
Juozas Kaziukėnas, CEO of e-commerce research firm Marketplace Pulse, recently told Bank Innovation these platforms are trying to reach companies underserved by banks. “It’s the issue of being too small for a bank and, even if they talk to you, you don’t have enough history of business execution to be a bank client,” he said. “[Alternative lenders] have better data than a bank would have and can offer loans to sellers who would have no access to funding.”
Atlanta-based Kabbage uses a variety of data points to rapidly underwrite small businesses looking for financing. The company uses banking data, accounting information and social media information to gain a holistic view of clients. It loans of up to $250,000 with terms of six, 12 or 18 months.