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Speaker 1: This is a Bloomberg Business Flash from Bloomberg World Headquarters.
Speaker 1: I'm Catherine Pottery. All three benchmarks rose in tandem today
Speaker 1: and closed their record highs. Traders pushed back bets on
Speaker 1: higher interest rates and it uneven economic growth. Everyport today
Speaker 1: show manufacturing activity in the New York region unexpectedly contracted
Speaker 1: this month, while a measure of homebuilder sentiment climbed seven
Speaker 1: out of ten industry groups in the SMP five hundred
Speaker 1: rows today, with technology and financial shares leading the way.
Speaker 1: We check the markets every fifteen minutes. The down Industrial
Speaker 1: laverage game sixty points one third percent to close at
Speaker 1: eighteen thousand, six hundred thirty six, the SMP five hundred
Speaker 1: rows six points a quarter percent and closed, and the
Speaker 1: NASDAC added twenty nine point six tents of a percent
Speaker 1: and closed at fifty two sixty two. West Texas Intermediate
Speaker 1: crude oil up a dollar thirty to a barrel, that's
Speaker 1: a gain of three percent at forty eighty spiked rolled
Speaker 1: up a dollar fifty, announced at seventy and the tenure
Speaker 1: treasury down twelve thirty seconds with the yield of one
Speaker 1: point five five per cent. And that's a Bloomberg Business flash.
Speaker 1: You're listening to Taking Stock with Kathleen Hayes and Pim
Speaker 1: Fox on Bloomberg Radio. Well, she may head up one
Speaker 1: of the most successful, fast growing fintech companies in the industry.
Speaker 1: Online learning the small business started back in two thousand
Speaker 1: nine a company called Cabbage. Katherine Bertalia actually was a
Speaker 1: graduate student in literature, John Steinbeck being one of her favorites.
Speaker 1: I don't know how she got from Steinbeck to fintech.
Speaker 1: Last you want to find out? Now? Cabbage is where
Speaker 1: the name of the company based in Atlanta, Georgia, and
Speaker 1: she's there today. Katherine, thanks for joining us. Thanks for
Speaker 1: having me so. First of all, your your small business
Speaker 1: lending is unique from a lot of other firms. You
Speaker 1: lend up to about a hundred thousand dollars. It's all online.
Speaker 1: Your your software quickly evaluates their readiness and it's directly
Speaker 1: to the senses themselves. That's correct. So how does it
Speaker 1: work so our customers are able to give us access
Speaker 1: to the data that they used to run their business.
Speaker 1: Have you've ever logged into some other website. With Facebook,
Speaker 1: it works much the same way. So we don't take
Speaker 1: the customers credentials, but they log into their check the account,
Speaker 1: or to quick books or UM their payment process or
Speaker 1: some other information UM some other site that they're using
Speaker 1: to run their business, and we're able to take that
Speaker 1: data to make a really rapid underwriting decision for them.
Speaker 1: Instead of having to produce and provide financial statements and
Speaker 1: UM bank statements and spend a lot of time gathering
Speaker 1: documentation for traditional loan we're able to do that work
Speaker 1: for them now. Catherine, taking a look at the operations
Speaker 1: of Cabbage, I understand that overall that the loans that
Speaker 1: you originated in the first half of the year rose
Speaker 1: in volume compared to but the pace of the growth
Speaker 1: has slowed. So in you originated about nine million dollar
Speaker 1: dollar's worth of loans, and I'm wondering what you can
Speaker 1: tell us so far about this year because you've got
Speaker 1: some competition, I mean, on debt capital loaned about one
Speaker 1: point nine billion. Yes, there are plenty of players in
Speaker 1: this space. The last six and nine months have certainly
Speaker 1: been interesting to watch from an outsider's perspective. I'm sure. UM.
Speaker 1: So there's certainly there's been some more crowding in the market,
Speaker 1: although that's really loosened up a little bit, I think
Speaker 1: in the last four or five months. UM. I think
Speaker 1: from our perspective, it's just a matter of being smart. Um,
Speaker 1: we're not trying to buy the market. We're trying to
Speaker 1: you know, move into new markets. And we really have
Speaker 1: two businesses. We have a direct lending business in the US,
Speaker 1: and we also license our technology to global financial stitutions
Speaker 1: banks like Santander and I m G and Scotia Bank worldwide.
Speaker 1: So we have our efforts focused in two places. How
Speaker 1: did you your companies based in Atlanta, Georgia? You did
Speaker 1: spend time in Silicon Valley. I'm interested to how you
Speaker 1: you ended up your headquarters on on the other side
Speaker 1: of the country. Uh and uh. Also we're good idea
Speaker 1: of this for this came from well, why Atlanta? We
Speaker 1: get asked that question a lot. Honestly, we lived there.
Speaker 1: It seems like a great it seems like a great place.
Speaker 1: Breast one a lot of people don't know is um
Speaker 1: it's there's everyone has to have a nickname with the
Speaker 1: word alley and of course our transaction alley, since of
Speaker 1: US payment transactions actually flow through it l into based businesses.
Speaker 1: When the Fed automated payments in the fifties, they did
Speaker 1: that in the Atlanta region and as a as a result,
Speaker 1: a lot of financial technology companies grew up in that area.
Speaker 1: So it's a great place to start a fin tech company. UM.
Speaker 1: And your other question about the name Cabbage, was that correct? Um? So,
Speaker 1: Cabbage is If you google cabbage with the C, you'll
Speaker 1: see the second definition of it is it's a metaphor
Speaker 1: for cash. It's a depression era term. Um. And we
Speaker 1: were looking for names, we um. We were struggling. Obviously,
Speaker 1: it's hard to find a domain name in Cabbage with
Speaker 1: the C with a lot cheaper than Cabbage with the K.
Speaker 1: So we picked Cabbage with the K. Now, Cabbage was
Speaker 1: founded in two thousand eight. I understand you've raised about
Speaker 1: two hundred and forty million dollars from companies such as
Speaker 1: Blue Run Ventures, Soft Bank Capital, Ups, Strategic Enterprise Fund
Speaker 1: UH late last year valuation of about a billion, and
Speaker 1: you raised more than a billion in debt capital today.
Speaker 1: Is that accurate? Um? We We don't comment publicly on
Speaker 1: the company valuation, but we do have um we have
Speaker 1: publicly announced the size of our debt facility, which is
Speaker 1: close to a billion dollars. And is there any update
Speaker 1: that you can give us on the launch of Carrot,
Speaker 1: which was the consumer lending business that was back in
Speaker 1: Have you decided that's not something that's not a way
Speaker 1: you want to go? Well, you know, the reason we
Speaker 1: launched Carrot was twofold. One of them was because we
Speaker 1: had a lot of people coming to our site who
Speaker 1: are actually consumers, not small businesses, so we wanted a
Speaker 1: product to serve them. But secondly, it allowed us to
Speaker 1: demonstrate sort of the flexibility of the platform. It was
Speaker 1: the first white label, if you will, launch that we
Speaker 1: had on the Cabbage platform and so as a result,
Speaker 1: that sort of catapuled this into the limelight from a
Speaker 1: from a software and technology perspective and what precipitated all
Speaker 1: of the relationships we have with these global banks. So
Speaker 1: we're excited about the way we were able to demonstrate
Speaker 1: the flexibility of the technology using Carrot, But that market
Speaker 1: is pretty crowded right now too, so we never intended
Speaker 1: to try to run out and compete with all of
Speaker 1: the consumer lenders in the in the world, Catherine, I'm
Speaker 1: interested to um ups of course, is also based in Atlanta.
Speaker 1: That was one of your first very clever partnerships back
Speaker 1: in twelve uh you entertaining agreement allowing small businesses to
Speaker 1: share their shipping histories with Cabbage. You've done so many
Speaker 1: more partnership Scotia Bank is one of your latest and
Speaker 1: how how is that one working? What's it? What does
Speaker 1: it mean for Cabbage? So the bank partnerships effectively allow
Speaker 1: um these large financial institutions to provide a a line
Speaker 1: of credit, a small business line of credit product to
Speaker 1: customers that they had a hard time serving before, not
Speaker 1: because of an underwriting process, but because they had a
Speaker 1: hard time serving small businesses who were looking for less
Speaker 1: than a hundred thousand dollars. Most banks spend the same
Speaker 1: amount of money to originative by thousand dollar loan is
Speaker 1: they want a five million dollar loan from a small
Speaker 1: business perspective. So the way the process works on the
Speaker 1: way to gather data makes it cost effective now for
Speaker 1: banks to serve really small businesses that were previously just
Speaker 1: checking account customers. They weren't borrowing customers. And so the
Speaker 1: way it works with the bank partners and Scotia Bank
Speaker 1: in particular is um it's their brand, it's their bank,
Speaker 1: but it's our technology in the back end of powering
Speaker 1: the loans they're making to their small business customers. I
Speaker 1: want to thank you very much for spending time with us.
Speaker 1: Katherine Petrolia is the co founder and the head of
Speaker 1: operations for Cabbage. They're based in Atlanta. Thank you for
Speaker 1: listening to Taking Stock. I'm pim Fox my co host
Speaker 1: Kathleen Hayes. This is Bloomberg. Coming up on Bloomberg Law,
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