Petal says that decades-old traditional credit scoring methods put lower-income consumers, immigrants and people of colour in a Catch-22 situation - they can’t get access to credit without a credit history, and they can’t build a credit history without access to credit.

What's more, data from Experian shows that the average American under 35 has a score that is considered by banks as "high risk" or "subprime" - making the whole system unfit for purpose.

In response, the startup has developed an alternative, which it calls 'Cashflow Underwriting', that uses machine learning and "common sense" to analyses, in real-time, an individual’s digital financial record, measuring objective components of their creditworthiness, like how much they make, save and spend over time, and the bills they pay each month.

This, says Petal, gives it a more accurate and precise understanding of how much someone can safely afford to borrow, and can identify consumers who are a good credit risk without having to rely solely on credit history.

"Something is terribly wrong when the industry decides an entire generation is, on average, subprime,” says Jason Gross, CEO, Petal. "Today’s credit system unfairly labels young Americans and other new-to-credit borrowers as ‘high-risk’, then punishes them with high interest rates and excessive fees. Petal breaks that cycle, using technology to give tens of millions of people the credit they deserve."

In September, the firm unveiled its no-fee credit card, along with a mobile app to help users own and manage it.

The new funding will be used to expand Petal's team and roll out the card to a waiting list of "thousands". With a team already including veterans from the likes of JPMorgan Chase, Capital One, AmEx and PayPal, the firm has also recently hired the senior counsel in the CFPB’s Office of Regulations, Shiri Wolf, as general counsel.