Aug 13, 2020, 11:00 EST
Bronx, United States, Aug 13, 2020, 11:00 /Comserve / -- American Express Co. is in advanced discussions to acquire Kabbage Inc., a small online business lender. The company is supported by a number of investors that include Japan’s SoftBank Group Corp. and Reverence Capital Partners.
August 11, 2020: American Express Co. is in advanced discussions to acquire Kabbage Inc., a small online business lender. The company is supported by a number of investors that include Japan’s SoftBank Group Corp. and Reverence Capital Partners. The agreement could be worth up to USD 850 million, including maintenance payments. Kabbage, Inc. is headquartered in Atlanta, Georgia and holds expertise in various online financial services. The company offers financing via an automated lending platform directly to small businesses and consumers.
American Express reported a net income of USD 257 million in the quarter ended on June 30, 2020, as compared to USD 1.8 billion in the quarter ended on June 30, 2019. Owing to the pandemic, the company suffered a net loss of income by as much as 85% when compared to the previous year. In these unprecedented times caused by the pandemic, the acquisition of Kabbage seems to be beneficial for American Express as Kabbage offers credit lines through an automated system that is capable of approving lines of up to USD 0.2 million in a matter of minutes. Moreover, the introduction of Kabbage Payments in October 2019, a payment management platform intended to support small companies handle transaction invoices and accounts, will help American Express in increasing the annual revenue as things start to get back to normal in the upcoming months.
Just last year, American Express also acquired acompay™, a digital payment automation platform launched in 2016. This acquisition offered the customers of American Express to make their payments easily while being able to manage their spending safeguarded by its security features. AmEx is already the country's biggest supplier of small business credit cards. The acquisition of Kabbage aims to help American Express become a larger provider of loans to mom-and-pop shops. The company has a combination of underwriting algorithm and incredibly simple-to-use interfaces which is exactly what is required to make loans at the scale now required.
About American Express:
The American Express Group, headquarters in New York City, is an American international financial services firm. The company was founded in 1850 and is one of the Dow Jones Economic Average's 30 elements. The company is well recognized for its payment machine, credit card and cheque services for travelers.
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