FILE PHOTO: American Express logo and trading symbol are displayed on a screen at the New York Stock Exchange (NYSE) in New York, U.S., December 6, 2017. REUTERS/Brendan McDermid/File Photo
NEW YORK (Reuters) - American Express AXP.N said on Monday it would buy fintech lender and platform Kabbage in a move aimed at bolstering its cash management offering to small businesses.
Financial terms of the transaction were not disclosed.
Backed by investors including SoftBank Group 9984.T, Kabbage started out in 2009 as an online lender, although it has since broadened its offering into other financial services for small businesses.
Building on its corporate cards strength, AmEx has been focused on growing its offering for small business clients into complementary areas such as payments and cash flow technology solutions, the company’s president of global commercial services, Anna Marrs, told Reuters.
This is the second acquisition which AmEx has made in recent months, as part of this strategy, Marrs added. AmEx announced in July 2019 it would buy digital payments firm acompay.
Under the terms of the deal, AmEx will acquire the technology, people and data of Kabbage, although not its loan book, according to a statement.
During the coronavirus pandemic, Kabbage has been heavily involved in the Paycheck Protection Program, the U.S. government’s small business stimulus program. The company said last month it had issued 225,000 approved loans for nearly $6 billion, making it the third-largest lender by application volume.
Lenders which used technology to improve the loan process expanded rapidly in the years since the financial crisis, although the recent economic uncertainty has put some under pressure. Last month, Enova International ENVA.N said it would purchase OnDeck Capital.
Reporting by David French; editing by Grant McCool