American Express is reportedly in talks to buy Kabbage, the small business lender, for $850 million. Amex is currently the largest provider of small business credit cards, so the acquisition would mesh well with existing strategies.
The rumored purchase comes as lenders have been hit hard by the pandemic, even credit card companies like Amex that have a more creditworthy client base have had to take billions in credit reserves. Small businesses have been hurt especially hard because retail locations were forced closed and companies like Walmart and Amazon invested heavily to outcompete mom & pop shops.
Because of current market conditions, this may be an example of buying low, as the $850 million price tag would be significantly below the $1.2 billion valuation that it last raised capital at.