Dealflow | January 31, 2019

Petal raises $30 million for alt-credit cards

Jessica Pothering
ImpactAlpha Editor

Jessica Pothering

ImpactAlpha, January 30 – New York-based fintech firm Petal has raised $30 million for its mission to “make credit honest, simple, and accessible.” Petal offers credit cards to people who lack a credit profile or score. A long roster of investors backed the company’s Series B round, including PayPal founder Peter Thiel’s Valar Ventures and socially-focused investors Third Prime Capital and the Social Entrepreneurs’ Fund.

Petal was launched in 2017 to “give millions of Americans access to credit who have previously been overlooked.” Its card is underwritten using alternative credit risk metrics, like how much cash is moving in and out of a person’s bank account, rather than traditional FICO scores. Its introductory cards start with credit limits as low as $200. Standard cards have limits up to $10,000. Petal’s interest rates range from 15.24% to 26.24%—in-line with or below many standard cards.

Forget FICO: How alternative credit-scoring is driving financial inclusion

The Petal credit card launched in October last year, coupled with an online and mobile dashboard that lets people track spending and make payments. Petal raised a $34 million debt round that coincided with the card’s launch. It raised a $13 million Series A equity round last January, which was also led by Valar Ventures.