Underbanked Petal Credit Card Raises $ 140 Million Series D

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Petal, an American credit card startup that is ditching traditional credit scores in an effort to enroll young and underbanked people, has raised $ 140 million in Series D funding.

Petal offers a Visa credit card that people can qualify for even if they have never used credit before. Instead of relying solely on credit scores, the company has developed proprietary technology that analyzes banking history, measuring creditworthiness by income, expenses, and savings.

The process, called “Cash Scoring,” measures economic fundamentals that are not usually factored into a credit approval decision, thereby helping people who traditionally have difficulty obtaining credit.

Once approved, customers get a mobile app where members can automate payments, track their credit scores, manage subscriptions, and keep their spending under control.

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 over $ 240 million in equity and over $ 450 million in debt financing

Petal co-founder and CEO Jason Brut describes 2021 as a pivotal year for the company, which has tripled its user base and more than quadrupled its monthly revenue.

“At a time when consumers faced unprecedented barriers to accessing credit, we turned the tide by 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 at Bloom Credit, Green Dot and The Bancorp. Allard will lead his new B2B data intelligence company, Prism Data, as Managing Director.

Petal is currently involved in a lawsuit brought by an entrepreneur named Cassandra Shih, who alleges she proposed a business that would target immigrants with no credit history to Petal’s co-founders, who ran with the idea and froze it from the company. Petal has denied the allegations and says he will defend himself against the lawsuit.

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