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  1. #1

    Is OnDeck making a move to compete with Kabbage?


  2. #2
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    Interesting read between the lines for sure. Google Ventures is mostly a separate entity from Google and most of their VC investment has been for firms that are "web based" or at least generate most of their revenue from applications used on the web.

    $17M isn't that "big" of a stake. If my intuition is correct, the funds are for development of an "arm" of OnDeck that most likely has to to with conducting business over the net. Google Ventures makes it's returns from the performance of the business and not fixed returns. At least I think so unless I'm out out to lunch.

    The mention of paypal in the article does point towards OnDeck going in the direction of capturing businesses that operate mostly with paypal or google checkout. I could be wrong but there are some definite clues for sure. And it wouldn't surprise me of course.

  3. #3
    FUND IT! Reputation points: 2147483647 Sean Cash's Avatar
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    Quote Originally Posted by Finance1 View Post
    Interesting read between the lines for sure. Google Ventures is mostly a separate entity from Google and most of their VC investment has been for firms that are "web based" or at least generate most of their revenue from applications used on the web.

    $17M isn't that "big" of a stake. If my intuition is correct, the funds are for development of an "arm" of OnDeck that most likely has to to with conducting business over the net. Google Ventures makes it's returns from the performance of the business and not fixed returns. At least I think so unless I'm out out to lunch.

    The mention of paypal in the article does point towards OnDeck going in the direction of capturing businesses that operate mostly with paypal or google checkout. I could be wrong but there are some definite clues for sure. And it wouldn't surprise me of course.
    It wouldn't make sense for Google corporate to buy a stake in On Deck Capital ("ODC"), hence they have a direct arm called Google Ventures specifically for certain types of investments. It's still Google.

    The logic reads like this:
    Wonga offered $250 million for ODC
    1. ODC got a realistic market valuation of their business

    2. ODC believed they were grossly undervalued by Wonga

    3. ODC learned the market needed more convincing that they are or will be worth more than $1 billion in a sale

    4. ODC knows that in order to maximize the valuation and success of a future IPO, they need a few highly respected investors to "get in early" on them to pique the market's interest.

    5. Enter Google Ventures and Peter Thiel. The $17 million figure is meaningless but both will have a seat at the boardroom table. And let's not forget Sandy Miller who got a board seat 3 months ago. Forbes ranks him as one of top 100 VCs in the world. (http://www.ivp.com/team/general-partners/sandy-miller). I assume everyone knows who Peter Thiel is.

    6. These names legitimize ODC and automatically increase their market valuation for a buyout or IPO.

    7. ODC was legitimized from a debt perspective by Goldman Sachs and is now made whole by incredible legitimacy on the equity side.

    8. ODC goes on to laugh at the recent $250 million offer they got.

    9. Countdown to sale or IPO begins.
    Last edited by Sean Cash; 05-02-2013 at 11:36 PM.

  4. #4
    In the event of an IPO or Sale, what do you think the future landscape of dealing with ODC will be from an ISOs perspective? Same, More Direct Sales vs ISO model, etc. ?

  5. #5
    FUND IT! Reputation points: 2147483647 Sean Cash's Avatar
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    This is related: a Kabbage co-founder got interviewed by Forbes yesterday and it didn't sound like they planned on staying situated in the e-commerce space forever. I predict they will make the leap and compete head to head with the rest of the mca companies, on deck etc.

    http://www.forbes.com/sites/miguelfo...rking-capital/

    So I don't know so much if On Deck Capital is making a move to compete with Kabbage Isaac because I think it's the other way around.



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