Kabbage purchased marketing company Radius

The US-based alt lender, which focuses on small- and medium-sized businesses (SMBs), has purchased Radius Intelligence, a marketing technology firm, according to TechCrunch.

Radius has built a database of information on around 20 million SMBs in the US. While the terms of the deal remain undisclosed, it's worth noting that Radius has raised over $107 million, per Crunchbase, and was last valued at around $200 million, per PitchBook data cited by TechCrunch. The deal will be financed off Kabbage's own balance sheet and doesn't require the fintech unicorn to raise additional funds.

Here's what it means: Being able to use additional data to make lending decisions for SMBs will likely help Kabbage give out more loans and better assess the risk of potential borrowers.

The bigger picture: Consolidation in the fintech space is increasing, making these players bigger threats to incumbents.

Kabbage's business will likely continue to grow with the acquisition — a theme that's becoming more prominent in the fintech space. Since its launch, Kabbage has provided over 185,000 US SMBs with over $7 billion in capital. Kabbage's revenue has gone up 40% compared with last year, while customers increased 60% in the same time.

With the help of the acquisition, this growth will likely further accelerate. Other fintechs are also acquiring companies to form bigger entities and boost their businesses: Just last week, German savings marketplace Raisin acquired Fairr to enter Europe's €12 trillion ($13.3 trillion) pension and retirement savings market.

Additionally, personal finance management (PFM) provider Meniga purchased competitor Wrapp to collaborate on products, while Plaid, which enables consumers to connect their bank accounts to other financial services providers through APIs, boughtQuovo, a similar company, for $200 million.

As an increasing number of fintechs purchase other companies, they're becoming bigger threats to incumbents, which should push legacy players to up their digital game and better compete in the changing finance landscape — or risk getting left behind.

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Source: Business Insider

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