$500m Raised, $4b Lent, Kabbage Small Business Lending King?

Rob Frohwein

In Episode #859, Nathan interviews Rob Frohwein. Back in 2008, he recognized that companies like eBay offered automated access to small business transactional data via APIs. He also realized that small businesses could simply share this data to allow underwriters to make better, faster credit decisions and provide a great user experience. Because of that, he co-founded Kabbage in Atlanta, Georgia, to leverage the power of real-time data automation through technology. The company has since expanded to serve all small businesses throughout the U.S., providing billions of dollars to more than 100,000 customers.

Famous Five:

  • Favorite Book? – Ideal Team Player
  • What CEO do you follow? – Jeff Bezos and Mark Zuckerberg
  • Favorite online tool? — Followup.cc
  • How many hours of sleep do you get?— 5
  • If you could let your 20-year old self, know one thing, what would it be? – Don’t stay contented

Time Stamped Show Notes:

  • 01:36 – Nathan introduces Rob to the show
  • 02:29 – Kabbage provides working capital to small businesses under their brand name Kabbage
  • 02:45 – Kabbage also licenses their software to banks globally
  • 03:04 – Kabbage asks their customers to give them access directly to key data that relates on how they run their business
    • 03:19 – Kabbage will now understand how a business operates now and over time
    • 03:25 – The connectivity allows Kabbage to work with automation for the business
  • 04:15 – Rob explains how a small business actually works with Kabbage
  • 05:25 – Kabbage built all their technology in-house complemented with some traditional data
  • 06:13 – There are 115K to 120K small businesses that had taken a loan
  • 06:21 – Kabbage is approaching $4M in capital delivered
  • 06:51 – Kabbage has raised closed to $500M
    • 07:11 – This is an equity raised
  • 07:12 – Kabbage has raised in debt as well
  • 07:45 – Kabbage has used their own capital for expansion
  • 08:03 – Kabbage is partnered with a bank
  • 10:08 – Kabbage started in 2011 with only $12K and banks won’t give them a loan
  • 11:25 – Rob shares about the licensing relationships that Kabbage has
  • 12:00 – Average loan amount
  • 13:00 – Businesses can have loans again depending on the status of their previous loan
  • 13:45 – Kabbage just raised a 250M round from soft bank corporation
  • 14:04 – Kabbage’s objective is to continue their lending business which if their core business
  • 14:31 – Kabbage is expanding geographically
  • 16:04 – Rob is very careful with the brands they’re working with
  • 16:36 – Rob is fascinated by cryptocurrency
    • 16:52 – “I believe good things come from innovation and technology”
  • 17:21 – Atlanta is really not trying to be under the radar
  • 19:05 – The Famous Five

3 Key Points:

  1. Small businesses are often rejected by banks for loans and don’t get as much support.
  2. Find a lending business that will not just lend you money but will be there for you while you grow.
  3. Constantly try and learn new things.

Resources Mentioned:

  • Simplero – The easiest way to launch your own membership course like the big influencers do but at 1/10th the cost.
  • The Top Inbox – The site Nathan uses to schedule emails to be sent later, set reminders in inbox, track opens, and follow-up with email sequences
  • GetLatka – Database of all B2B SaaS companies who have been on my show including their revenue, CAC, churn, ARPU and more
  • Klipfolio – Track your business performance across all departments for FREE
  • Hotjar – Nathan uses Hotjar to track what you’re doing on this site. He gets a video of each user visit like where they clicked and scrolled to make the site a better experience
  • Acuity Scheduling – Nathan uses Acuity to schedule his podcast interviews and appointments
  • Host Gator– The site Nathan uses to buy his domain names and hosting for the cheapest price possible
  • Audible– Nathan uses Audible when he’s driving from Austin to San Antonio (1.5-hour drive) to listen to audio books
  • Show Notes provided by Mallard Creatives