US marketplace lender signs Orchard partnership

Small business-focused Kabbage will offer its Karrot consumer loan products on institutional investor platform, Orchard.

Atlanta, Georgia-based marketplace lender, Kabbage, has signed a partnership with investment platform Orchard Platform, to make its consumer loan product, Karrot, available to a wider investor base. Institutional investors can access marketplace lenders on the platform, allowing them to analyse the lenders and deploy capital.

Kabbage was established as a small business lender before expanding into consumer finance. The marketplace uses electronic borrower payment records to assess credit-worthiness and make a lending decision. The tie-up with Orchard is designed to help Kabbage grow the consumer lending side of its business through access to investors.

Kabbage has funded more than $700 million in loans to businesses since its launch in 2011, according to a statement.

“Kabbage is a pioneer in the use of novel data and advanced analytics for issuing credit,” said Matt Burton, chief executive officer and co-founder of Orchard. “This partnership reflects the changes taking place in the world of credit, where data and transparency are paving the way for skilled lenders to create products that fit the needs of today’s borrowers while allowing these loans to be funded through a scalable and data-driven marketplace of sophisticated investors.”

Orchard, which was founded in 2013, is designed to allow larger investors scale their lending via marketplace platforms. It provides investment strategy, real-time execution and reporting, analytics, and access to supply.

Kabbage’s venture capital backers include SoftBank Capital, Thomvest Ventures, Mohr Davidow Ventures, BlueRun Ventures, the UPS Strategic Enterprise Fund and TCW/Craton. Individuals that have invested in the lending platform include David Bonderman, founder of TPG Capital and Warren Stephens, chief executive officer of Stephens Inc.