Petal nears unicorn status with fresh $140M in capital to upend ‘broken’ traditional credit system
- BySaksham Daga | January 6, 2022
In recent years, more and more startups are trying to make their credits more accessible to consumers. One such startup, Petal, announced today that it has raised $ 140 million in a Series D funding round.
The company’s new valuation is $ 800 million, more than three times the value of Petal when it announced the Series C round of $ 55 million in September 2020, according to trading sources.
Founded in 2016 and based in New York, Petal offers two Visa credit card products for poorly serviced consumers with little or no credit history. Start-ups say their goal is to help people “build credit, not debt.” And it provides the loan based on cash flow, not creditworthiness. Tomo Credit, which TechCrunch also sells, is a similar model. (The card is issued by the FDIC member WebBank).
Specifically, Petal offers “up-to-date” Visa credit cards along with a mobile app designed to allow people to “responsibly” create credits and manage their finances.
The recent increase follows the year Petal tripled its user base and more than quadrupled its revenue from $ 11 million to nearly $ 50 million. Currently, there are nearly 300,000 petal cardholders that the company calls “members.” According to Jason Gross, co-founder and CEO of Petal, 10,000 to 20,000 new members are added each month. Petal members are primarily young digital native consumers who build credit for the first time, but startups also serve many other customer segments, including customers who are considering credit restructuring. I am. The
Petal was in secret until the launch of the first product and the announcement of the first funding in September 2017. The company’s technology analyzes the history of banks, assesses creditworthiness by taking into account personal income, spending and savings, and states that it can qualify even if you have never used credit before. This is known as “cash scoring,” and it is said that this approach will make credit available to a wider range of people and “on conditions tailored to each individual’s individual financial situation.” I am.
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