Petal, an NYC startup that is keen on disrupting the world of credit cards, announced this week it closed on a $55 million Series C round led by existing investor Valar Ventures, bringing its total funding raised to more than $100 million.
What makes Petal different is that it doesn’t rely on users’ credit scores to establish their credit worthiness. Instead, it looks to metrics like banking history, spending, income and savings. This is meant to make credit more accessible, and allows the company to tailor its offerings to each user’s unique financial situation.
If approved, users get access to the Petal credit card and its various tech-enabled financial planning tools.
CEO and co-founder Jason Gross says Petal’s model is even more important now in the midst of the COVID-19 pandemic. Millions of Americans have had their hours cut or lost their jobs altogether over the last several months, which has caused individuals who may not have had the best financial footing before to fall even further behind.
“Traditional credit scores have become less reliable in the COVID economy, forcing mainstream banks to significantly scale back access to credit at a time when many people need it most,” Gross said in a press release. “Cash flow scoring allows Petal to continue making credit available even in these volatile economic conditions.”
The last time Built In caught up with Petal was when it closed a $13 million Series A round in 2018. Back then, the company had just unveiled its credit card and claimed it had more than 40,000 people on the waitlist. Since then, the company has also raised a $30 million Series B round and added tens of thousands more customers, as reported by TechCrunch.
Looking ahead, Petal is planning to grow both its customer base and team, with various open positions across its engineering, marketing, people and product departments. Gross says that the goal is to “double down” on its mission to help more people access credit, especially in these economically uncertain times.
“This mission matters even more in the COVID-19 era, when credit has become much harder to obtain — particularly for people with low scores or with no previous credit history,” Gross wrote in a recent Medium post. “This year has brought immense challenges for everyone. We’re hoping that we at Petal can play a role in rebuilding our economy and the financial lives of U.S. consumers.”
