Petal, a US credit card startup that is ditching traditional credit scores in an effort to sign up young people and the underbanked, has closed a $55 million Series C funding round led by Valar Ventures.
Rosecliff Ventures, Afore Capital, RiverPark Ventures, Great Oaks Venture Capital, GR Capital, Nelstone Ventures, Abstract Ventures, Ride Ventures, The Gramercy Fund, Adventure Collective, Starta Ventures, and NFL star Kelvin Beachum, Jr joined the round, which brings Petal's total funding to more than $100 million.
Petal offers a Visa credit card that people can qualify for even if they’ve never used credit before. Instead of relying solely on credit scores, the firm has built proprietary technology that analyses banking history—measuring creditworthiness based on income, spending, and savings.
The process, referred to as “Cash Scoring”, measures economic fundamentals that aren’t typically considered in a credit approval decision, helping people that traditionally have trouble getting credit.
Once approved, customers get a mobile app where members can automate payments, track their credit scores, manage subscriptions, and stay on top of their spending.
Petal says that helping more people get access to credit is becoming even more important during the Covid-19 pandemic when people with low scores or no history are finding it increasingly difficult.
"Traditional credit scores have become less reliable in the COVID economy, forcing mainstream banks to significantly scale back access to credit at a time when many people need it most,” says Jason Gross, CEO, Petal. “Cash flow scoring allows Petal to continue making credit available even in these volatile economic conditions.”