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Kathryn Petralia

Executive

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Person
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Executive
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The profile

Co-founder and former president of Kabbage. One of three former executives named in the Justice Department's December 2024 False Claims Act complaint (E.D. Tex. 4:21-cv-110-SDJ); the case is pending and no court has ruled on the allegations.

Individuals whose conduct was challenged or called into question during or after the pandemic. See sources: U.S. complaint in intervention, Dec. 20, 2024 DOJ release, Dec. 20, 2024

Identity and role

Kathryn Petralia co-founded Kabbage, Inc. in Atlanta in 2008 (the company launched publicly in 2009) and served for years as its president. Her public biography says Forbes named her the 98th most powerful woman in the world in 2017 (kathrynpetralia.com). She is listed as "Co-Founder, Kabbage" among the signatories of the March 24, 2020 OnDeck-published "Letter to Congress" (archived letter text).

Biography

Her public biography lists earlier roles at WorthKnowing.com, a consumer credit-score site she co-founded that was sold to CompuCredit and TransUnion; seven years in corporate development at Atlanticus (formerly CompuCredit); and Vice President of Strategy at Revolution Money (kathrynpetralia.com). At Kabbage she served as chief operating officer and later as president while co-founder Robert Frohwein served as CEO (E.D. Tex. 4:21-cv-00110, ECF 65, citing the complaint ¶¶ 57–59). Kabbage built automated underwriting that pulled data from a borrower's bank accounts, payment processors, and accounting software to issue small-business lines of credit quickly. American Express acquired Kabbage's core technology and team in 2020; the legacy loan-servicing business was left behind in a separate entity, later renamed KServicing, which filed for Chapter 11 bankruptcy in October 2022.

The March 24, 2020 letter & pandemic relief

The letter, signed by online and non-bank lenders, urged Treasury to let firms like theirs move "upwards of $500 billion" to small businesses and stated, "We seek no gain from this crisis." Kabbage became a PPP lender in 2020 and, per the Justice Department, approved more than $7 billion in PPP loans that year, for which it was paid more than $217 million in processing fees.

In May 2024 the company entity, by then KServicing Wind Down Corp., settled False Claims Act allegations through two agreements giving the United States an unsecured bankruptcy claim of up to $120 million; as part of that resolution the entity admitted specific loan-calculation errors (double-counting state and local taxes, failing to cap compensation above $100,000 per employee). On December 20, 2024 the Justice Department announced it had intervened in a whistleblower suit, United States ex rel. Pietschner v. Kabbage, Inc. (No. 4:21-cv-110-SDJ, E.D. Tex.). It filed a complaint against the former individual executives (Petralia, Frohwein, and Spencer Robinson), alleging they caused the submission of false claims to maximize fees before the October 2020 Amex sale. The case against the individuals is an unproven allegation; there has been no finding or admission of liability by Petralia.

Where they are now (2025–2026)

After the Amex deal, Petralia co-founded Keep Financial Technologies with Frohwein, a platform letting employers pay upfront cash that vests over time. Keep was reported sold to Apprenta, a Washington, D.C. company, in 2025.

Sources held in this archive

Original source documents and archived captures

Sources

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