(Bloomberg) -- Petal, a credit-card startup, has raised $140 million in a funding round led by Tarsadia Investments.
The funding round s the New York-based company at $800 million, according to a person with knowledge of the matter. Valar Ventures, CUNA Mutual, Encore Bank, Volery Capital Partners, Gopher Asset Management, RiverPark Ventures, Afore Capital and Gaingels are among other participating investors, the company said.
“2021 was a breakout year for Petal,” Jason Gross, Petal’s co-founder and chief executive officer, said in an emailed statement. “At a time when consumers faced unprecedented barriers to accessing credit, we bucked the trend -- using our unique technology to expand access like never before.”
“The traditional credit system is broken and consumers are in desperate need of more modern and accessible financial products,” said Rishi Reddy, head of venture and growth investing at Tarsadia, a Newport Beach-based family office. “In addition to exponential user growth, Petal has proven the power of its tech as evidenced by stellar credit performance and the rapid scaling of Prism.”
New funding will be spent in part on building out the company’s business-to-business data intelligence platform known as Prism Data, which hired Erin Allard, an alum of Bloom Credit, Green Dot and The Bancorp, as general manager.
The startup offers a solution to consumers who don’t qualify for traditional credit cards, or who have no credit history. Its technology measures creditworthiness on income, spending, and savings in a process it refers to as “CashScoring,” and has approved almost 300,000 credit cards to date. The company says its members with no prior credit history have achieved an average credit score of 676, which then qualifies them for other loans and mortgages that were previously unavailable.
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