US credit card start-up Petal bags $35m in fresh funding, spins out Prism Data
New York-based credit card start-up Petal has secured $35 million in a funding round led by Valar Ventures and has also spun off Prism Data, its B2B-focused data infrastructure and analytics subsidiary.
Other investors joining the funding round include Story Ventures, Core Innovation Capital, and RiverPark Ventures. The round also includes strategic investments from Synchrony and Samsung Next.
Founded in 2016, Petal helps people build their credit scores by providing access to Visa credit cards issued by WebBank, with a focus on people who have never used credit before or have little to no credit history.
The firm says it has decided to spin off Prism Data, which provides open banking infrastructure and data analytics for credit scoring, as it wants other financial services providers to leverage its automated cash flow underwriting infrastructure to help them improve loan decision-making and expand access to credit.
The company says its underwriting infrastructure measures creditworthiness based on banking history including consumer earning, saving, and spending trends, “instead of relying solely on traditional credit scores and reports”.
The new investment will be split between Petal and Prism Data and will be used to scale the entities and “drive innovation”.
Petal says it has handed out nearly 400,000 credit cards to consumers to date, with over 100,000 approved in 2022. It also claims to have achieved more than $80 million in annualised revenue last year, with the aim of achieving profitability in 2024.
With the new funding, Petal has now raised nearly $300 million in equity capital and more than $450 million in debt financing. Last January, it secured $140 million in a Series D round at a valuation of $800 million.