American Express (AmEx) has signed the deal on purchase of fintech startup Kabbage.

Bloomchain.ru reports that AmEx did not disclose the financial details, but Bloomberg has reported that the purchase will cost AmEx USD 850 million.

Kabbage provides loans to small and medium-size businesses, using machine learning algorithms for assessment of the clients’ credit worthiness. The startup also offers settlement accounts for businesses, protected under the program of Federal Deposit Insurance Corporation (FDIC), and financial analytics tools.

Since its foundation in 2009, the startup ha raised around USD 2.5 billion. In the latest investment round, which the startup closed in 2017, SoftBank evaluated Kabbge at over USD 1.2 billion.

Accordint to Frank Media, Kabbage’s portfolio also includes loans issued under the wage protection program. Their total amount stands at USD 7 billion.

AmEx and Kabbage plan to offer small businesses a broader set of tools for financial flow management as well as products for making up of the companies’ current assets.

“We are joining not just some company but a company we have admired for a long time, a company that shares our views on development of small business,” Kabbage said in a statement. According to the startup, it will focus entirely on easing “the difficult state of small business, its life, and strengthening of the business through automated and simple solutions for complicated tasks related to financial services”, and cooperation with AmEx will help scale up the activity.

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