U.S-based financial technology company Kabbage lends millions of dollars every day to small businesses. Offering up to a $250,000 loan on a line of credit, it helps individuals and entrepreneurs handle their cash flow. Currently, the company boasts partners like Alibaba, Airbnb, and WeWork, and has a valuation of over $1 billion.
When Kabbage co-founder and president Kathryn Petralia sits down for a fireside chat on growth, then, it’s worth paying attention.
Petralia has been listed alongside Sheryl Sandberg and Oprah Winfrey as one of Forbes’ 100 most powerful women: an accolade that has a lot to do with her helping grow Kabbage from humble origins to bona fide tech unicorn. When the company was first created in 2008, it was only providing its small business loans to sellers on eBay. Six years later, it was able to serve any organization.
“We still do the same exact thing today,” she says, speaking with moderator John Kotsier at Vancouver’s Traction Conference. “We still provide working capital to eBay customers. It's just that they only represent about 2 percent of our customer population. We basically have just been drawing these concentric circles around their business.”
Much of Kabbage’s innovation has been based on trial and error. Deciding to tackle the U.K. market, the company got a lending license in about six weeks—but it took three years to get a bank account. It then launched a consumer fintech product right before the lending meltdown in 2015. Despite its setbacks, though, the company was able to use the data it accrued to drive its growth and secure over $200 million in revenue every year.
“It's funny—Rob, my co founder, says that every day, if you're an entrepreneur, if you have any sort of startup, every day is just another punch in the face,” Petralia says with a laugh. “Something's going to happen every day.”
Having conquered the hurdles of raising or acquiring more than $2.5 billion of venture capital and debt financing, Petralia suggests that Kabbage’s biggest challenge to date is hiring the right people. Over 600 employees currently work for the company in offices across Atlanta, San Francisco, Denver, New York, and Bangalore, and that weighty roster of talent brings difficulties in maintaining the same company culture.
“Once you get that big, you don't know everybody,” she says. “You don't have this direct feedback loop with everyone. So things are happening, and you have no idea what they are. And you sort of have to become comfortable that you can't know everything that's happening. And you have to trust that people are doing the right thing—and sometimes they don't. […] That's a challenging thing.”
On top of learning to let go of control over employees, the second difficulty for Kabbage—like most tech companies—is recruiting the right people.
“Our Bangalore office has been really, really interesting as well,” Petralia says. “We opened that office because we couldn't get enough data scientists in the U.S., and so we just went to where the people were. Our immigration policies [in America], unfortunately, are not as helpful as Canada’s, so we couldn't bring folks to our offices—so we went to theirs. It's really been a fantastic experience.”
Kabbage is not the only tech company to praise Canada’s proactive laws for welcoming skilled workers. The past 12 months have seen a number of high-profile Silicon Valley companies setting up offices in Vancouver including Asana, Lyft, Mailchimp, and Tile, and is soon to be home to a massive Amazon expansion, set to bring around 4,000 technical jobs to the city. CEOs from the U.S. have suggested that the city is an attractive destination because of how easy it is to import talent, and the opportunity it presents for tapping the highly educated labour force in B.C.
As a result, Petralia suggested that Kabbage is strongly thinking about setting up shop in Vancouver.
“We've considered that we think that this is our next stop,” Petralia says. “I've never said it before publicly, but we were really excited about that.”
Kate Wilson is the Technology Editor at the Georgia Straight. Follow her on Twitter @KateWilsonSaysMore