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Credit card for the underbanked Petal raises $140 million Series D

Credit card for the underbanked Petal raises $140 million Series D

Petal, a US credit card startup that is ditching traditional credit scores in an effort to sign up young people and the underbanked, has raised a $140 million Series D round of funding.

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.

The latest investment was led by Tarsadia Investments, with participation from Valar Ventures, CUNA Mutual, Encore Bank, Volery Capital Partners, Gopher Asset Management, RiverPark Ventures, Afore Capital, Gaingels, and a number of other new and existing investors. To date, Petal has raised more than $240 million in equity capital and more than $450 million in debt financing

Petal co-founder and CEO Jason gross describes 2021 as a break-out year for the firm, which tripled its user base and more than quadrupled its monthly revenue.

"At a time when consumers faced unprecedented barriers to accessing credit, we bucked the trend—using our unique technology to expand access like never before," he says.

Petal also announced the hiring of Erin Allard, who previously held executive positions with Bloom Credit, Green Dot, and The Bancorp. Allard will lead its newly formed B2B data intelligence business, Prism Data, as general manager.

Petal is currently embroiled in a lawsuit brought by by an entrepreneur named Cassandra Shih, who alleges that she pedalled the propostion for a business that would target immigrants with no credit history to Petal's co-founders, who ran with the idea and froze her out of the company. Petal has denied the allegations and says it will defend itself against the suit.

Comments: (1)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 07 January, 2022, 12:14Be the first to give this comment the thumbs up 0 likes

Kudos to Petal for being yet another Fintech that sells what customers really want to buy. Ditto Slice and Uni in India and a clutch of BNPL providers all over the world. 

When Will Fintechs Sell What Consumers Want To Buy? 

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