Petal, which offers credit cards to people without any credit score, raises $ 30 million from Series B led by Peter Thiel's Valar Ventures


Petal, a Fintech start-up that offers credit cards to the creditless, raised $ 30 million in Series B financing under the leadership of Valar Ventures, Peter Thiel, with the participation of many other investors, including Greyhound Capital, Third Prime Capital, RiverPark Ventures, Social Entrepreneurs Fund, Brooklyn Bridge Ventures, Afore Capital, Rosecliff Ventures, Great Oaks Venture Capital, New Venture Ventures, Abstract Ventures, Ride Ventures, Story Ventures and Gramercy Fund.

This latest campaign represents the company's third institutional cash injection in the space of one year, following its $ 13 million Series A financing round last January and its debt financing of $ 34 million. dollars in October.

Petal launched its credit card as part of a pilot project in September 2017, although it was not fully released until October of the following year.

Alternative credit card

Founded in New York in 2016, Petal offers an alternative credit card combining "data and common sense" to qualify applicants. Petal does not rely on traditional credit ratings, in part because many people do not have credit ratings, but also because such a system does not give a complete picture of a company's financial position. particular. Instead, Petal uses a process called "cash flow underwriting" that combines Big Data with machine learning to inspect a candidate's overall digital financial data. This means that you have to access a user's bank account to analyze their inputs and outputs.

It should be noted that Petal does not charge fees as such; instead, he earns money through traders' transaction fees and consumer interest payments if they do not pay the full balance when due.

Like other finance startups, Techal offers a mobile app that allows users to track all their expenses and schedule automated payments, reminders, and more.


Above: Petal

In addition, the Petal app does not highlight interest rates, but displays all the numbers in dollars. For example, it will show how much money remains to be paid and how much you will be charged for the amount you want to repay – assuming it is less than the total amount.

Petal application

Above: Petal application

The credit limit is set between $ 500 and $ 10,000, depending on the financial health (and needs) of the person. The annual percentage rate of charge (APR) is between 15.24% and 26.24%, based on the current US prime rate.

Show me the money

Valar Ventures, co-founder of PayPal, is notable: Valar has not only invested in a number of renowned Fintech startups, such as N26 and TransferWise, but has also led the Petal A Series investment last year. Continuing Petal's follow-up tour suggests that Valar Ventures likes what he sees.

"We are looking to double where our businesses succeed," said Andrew McCormack, founding partner of Valar Ventures. "The quality of Petal's talent, dedication to the mission of financial fairness and transparency, and the tremendous market response since its launch have made us very pleased to expand our investment in Petal."

Petal is one of many startups that are transforming the way consumers and businesses access money. Earnin, for example, recently raised $ 125 million for a no-cost payday advance platform, while a company called PayActiv raised $ 20 million for a similar proposal.

Elsewhere, a new company called Brex recently launched a credit card for startups and revealed that it had already raised $ 57 million from a host of big names including the founders of PayPal, Peter Thiel and Max Levchin.

It seems that the traditional credit sector is ripe for disruption – and Petal is at the forefront of the movement.

In addition to funding information, Petal also announced the appointment of two new executives to its management team: Tom Greco is appointed vice president of operations at Petal, after holding similar positions at GreenSky, Paymerang, Convergys and Capital One. And the former CEO of CAN Capital now joins Petal as General Counsel.

"In the last two years, we have focused on building a great team and a special product," said Jason Gross, co-founder and CEO of Petal. "Now, with new funding and new leaders, we are ready to significantly evolve our business and our team."

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