Kabbage provides financing options for online merchants.

Kabbage provides financing to online sellers, leveraging information generally available from online marketplaces to assess risk and help determine advance amounts and related fees and interest.

There is a rapidly growing delta between small-to-medium businesses’ need for credit and its availability from traditional sources. For the large and growing segment of online retailers who offer their products via online marketplaces, representing over $48 billion on Ebay alone in 2008, the divide is even greater. This segment is underserved for financial services products because traditional underwriting and lending criteria do not account for a ‘virtual’ commerce business model, or the value of recently sold inventory.

The largest contingent of small businesses selling online is represented on Ebay, though there are many other platforms that facilitate transactions between buyers & sellers, including Amazon Marketplace, Etsy, Craigslist, iOffer and uBid. While these platforms provide a low-cost marketing channel, the nature of online and auction sales necessitates a delay between the moment the item is listed and when it is sold. This delay, combined with payment delays that can be imposed by PayPal and other payment types, creates a cash flow and growth constraint for many businesses.

Online retail sales as a percentage of total retail sales have doubled in the past five years. Ecommerce sales overall in 2006 were just over $107 billion, representing 2.7 percent of total retail sales . There are over 100 million Ebay users in the US today, with an estimated 200 million new listings in 2Q, 2008 alone. There are an estimated 5 million power sellers transacting over $48 billion on Ebay and more than 8 million high-volume sellers representing over $70 billion across all marketplaces.