Emailed on August 7, 2020 in The Friday Forward

Kabbage, the fintech startup that outperformed many large lenders during the Paycheck Protection Program, is weighing a sale, two people familiar with the situation said.

The Atlanta company has hired FT Partners after receiving expressions of interest, the people said. Kabbage could sell for $750 million to $1 billion, one person said. Possible bidders include financial institutions and technology companies.

The numbers: Five months ago, in March, Kabbage stopped originating loans for its Celtic Bank partnership as Covid-19 shut down businesses across the U.S. The company furloughed a significant number of its roughly 600 employees and stopped handling new loans for its small-business clients. 

In April, the Small Business Administration approved several fintechs, including Kabbage, to provide loans for the Paycheck Protection Program. That turned out well.

Kabbage partnered with 135 community banks to process more than 270,000 PPP loans valued at $6.5 billion. At 270,000, Kabbage’s volume was nearly the same as the 274,451 loans logged by JPMorgan Chase, the biggest PPP lender, as of July 24.

Kabbage has raised nearly $500 million in equity capital and over $2 billion in debt funding. This includes a $250 million investment from SoftBank in 2017 that valued the company at $1.2 billion.

So it's likely a Kabbage sale could be a win for fintech's in general, but another loss for Softbank.