The credit card company Petal, which was created to help people build credit and spend frugally, has raised $140 million in a Series D round led by Tarsadia Investments.
Jason Gross, co-founder and CEO, announced the news in a post on Medium on Wednesday (January 5), adding that 2021 was a “highlight year” for the company.
“At a time when consumers have faced unprecedented barriers to accessing credit, we have bucked the trend – using our unique technology to expand access like never before,” Gross said in the post.
Petal helps build credit by providing Visa cards, and users can qualify for cards even if they never use credit. Petal Technology analyzes banking history and measures creditworthiness based on income, spending and savings.
By measuring credit through cash flows and other things that aren’t usually taken into account by a credit application, Petal is helping more people qualify, especially amid the turbulent pandemic economy. The post notes that Petal has strived to reach underserved customers, with many members having “poor or no credit history” when they first applied for a card.
The press release says Petal tripled its user base in the past year and saw its monthly revenue quadruple.
Petal also recently launched Prism Data for Business to Business (B2B) service, which uses the company’s cashScore credit program, translating raw transaction data into usable insights and scores.
Gross said the company has “big plans” for this year, including appointing Erin Allard as Prism Data’s general manager. Gross described her as “a passion for building a more just and inclusive financial system.”
PYMNTS notes that Petal says behavioral analytics is a powerful way to address customer security and qualification issues.
See also: Petal on reducing fraud and mitigating in-flight friction through behavioral analytics
Head of Risk Management, Manik Chawla, said behavioral analytics help “improve our product decisions in terms of identifying fraudsters, but [also] It helps us reduce friction for worthy borrowers.”
Fraud has emerged as the biggest obstacle in preparing clients. Chawla said that bad actors often have several tactics to portray them as real agents. Then, they open accounts to do things like money laundering or theft, identity theft and composing new identities in a practice called synthetic identity fraud.