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Kabbage Ifc

502566_kabbage_ifc

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Arnaldo Jonathan Alvarado Ruiz
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33 views

Kabbage Ifc

502566_kabbage_ifc

Uploaded by

Arnaldo Jonathan Alvarado Ruiz
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 35

Meet Kate.

1
Meet Kate.
She’s a Small
Business Owner.

2
Meet Kate.
She’s a Small
Business Owner of
a pet supply store.

3
Kate needs funding to help with things like:

4
Kate needs funding to help with things like:

5
Meet Rich, the
traditional banker.

6
Rich doesn’t
understand
Kate’s business.

7
Rich doesn’t
understand
Kate’s business.

When bankers like Rich


look at Kate, all they can
see is a credit score.

8
Built for big business,
Rich’s loan process
frustrated Kate.
In fact, bank’s overhead &
processes make it unprofitable
to underwrite smaller lines.

9
How did a small data
company revolutionize the
financial services industry?

10
Kate needs funding to help with things like:

11
Kabbage helps SMBs use the power of
their business data to get working capital.

+ Cash in 7 minutes or less + Lines between $2,000 and $125,000


+ Short application + Works across all channels
+ Automated, painless process

12
Our new model is the start of something big.
I’ve got sales, social,
shipping & payment data We’ve got cash

THE VIRTUOUS
CYCLE OF
KABBAGE

13
The virtuous cycle is creating a
360˚view of Kate’s business.

+ Credit history + Customer reviews


+ Banking history + Accounting & tax info
+ Identity + Payment processors
+ Social data + Ecommerce software
+ Supplier information + Shipping history

14
Today, Kabbage collects and analyzes
real-time, verified data from nearly two
hundred thousand SMB customers.

15
We connect the data dots to mitigate credit
risk and fund small businesses.

16
Some call it Big Data.
We call it Data Context.

17
Kabbage 1.0 launched in 2010

+ Instant financing for


eBay customers
+ $500 up to $12,000
+ 57 Qualified Accounts
+ $47,900 advanced

18
Kabbage in 2014
+ Instant financing for all
businesses with Business
Checking underwriting!

+ $2,000 up to $125,000

+ 30K Qualified Customers

+ $500,000+ provided

+ 2 issued patents

19
Automation and
Persistent Data Connections
1 Massive data collection and analysis for each customer

2 Continuous daily monitoring and decisioning of each customer

3 Powerful underwriting model improves upon traditional models

4 Highly disruptive Internet-based provider of growth capital to SMBs

5 Robust, proven, deep underwriting platform leveraging Internet “big data”

20
Lessons Learned

+ Mandatary equipment: iron stomach


+ Customers are extremely willing to provide access to data
+ Model iteration and testing is critical for a rapidly expanding
data pool
+ Sales works. Sometimes people actually want to talk to someone
+ Imitation really is the most sincere form of flattery

21
Bumps & Bruises

+ SMBs can be difficult to find and harder to underwrite


+ Third-party technology: you get what you pay for
+ Managing data partners is critical
+ Sad face. There are bad guys.
+ Growing a business while maintaining your culture

22
How is Kabbage different?
Hint: We don’t act like a bank.

23
Kabbage Culture

24
The SMB Lending Model is Ripe for Disruption
Small Business is BIG BUSINESS

228 MM 65% 283 B2


IN THE U.S. OF ALL NEW
50+ %1
TOTAL OUT
OF PRIVATE
JOBS IN THE U.S. STANDING DEBT
NONFARM GDP

+ Micro loans (≤ $100K) to SMBs have fallen every + SMB loans represent only 1.21% of all business
year for the last five years loans and are shrinking
+ The largest banks (≥ $50B in assets) have shrunk + CRA institutions reported the number of micro
their SMB lending (↓17%) from 2008-11 business loans fell by 2M Y/Y in 2010

25
39% of small business applicants
fall out of the application process.
Duration of credit delivery activities:

Write-up Initial Final Closing


Day 1 to decision to
to initial final decision to
write-up
decision decision to closing booking
Sum
Media 18 days
Duration 5 2 1 8 2

Average 5%
21% 13% 9% 4%
drop-off
rates
61% 48%
Approved Approved

Source: American Banker 17th Annual Small Business Banking Conference: McKinsey & Company: 2011 Credit Delivery Model Survey
26
Kabbage created a better way
CONTINUOUS MONITORING OF PAYMENT, SALES, BUSINESS & PERSONAL DATA

PAYMENT DATA

SALES DATA

BUSINESS & PERSONAL INFO

AVERAGE >250,000 TRANSACTIONS ACROSS 5 DATA SOURCES ANALYZED PER CUSTOMER


COMMON USE CASES FOR SMALL BUSINESS OWNERS:

27
The more data we add,
the more our business grows.
Customers grow revenue 72% after taking cash!
Number based on average growth across all Kabbage customers in the 6 months before taking their 1st Kabbage loan vs. 6 months
after taking their first Kabbage loan. Individual results may vary

28
Others see this as the future of alternative lending.
This is Kabbage now.

29
Kabbage is the Industry Leader
+ More than 200,000 loans over 3 years + $106 million in equity raised
+ More than $500 million USD loaned + $300 million in debt raised
+ #1 Online Provider of working capital + 2 issued patents

30
Kabbage is the most disruptive force
in specialty finance.
Access to online data is transforming the underwriting process.

+ Highly-disciplined credit screening + Efficiently reaches SMBs


and real-time monitoring nationwide and globally via
+ Proprietary “big-data” analytics Internet
capabilities + Profitably address long tail with
+ Robust credit model outperforms low cost model
traditional models + Over a dozen online and offline
+ Ongoing relationship with customers data partners
reduces risk

31
Introducing the Kabbage
white label product:

Powered by:

32
Global Expansion

33
34
Thank You!

35

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