While fintech has been known to challenge banks, startup Petal is taking aim at the credit card industry, which has turned off customers with uninspiring rewards, clunky mobile apps and surprising fees.
TechCrunch reports that the New York-based credit card issuer has just raised $30 million Series B equity round to use in its mission to make credit more accessible. Valar Ventures, which also led the company’s $13 million Series A round last year, led this funding round, according to the outlet.
Unlike banks that primarily factor an applicant’s FICO score, Petal’s underwriting model takes cash flows into account more than a less mutable score, TechCrunch says. Petal believes that its data-focused approach will enable it to uncover otherwise overlooked customers.
A public rollout of the Petal credit card on the Visa network took place last October after a successful private test. Rather than charging fees such as an overdraft fee, late fee, international fee or annual fees, Petal’s revenue comes from interest rates and through the transaction fees charged with use.
“The card is really simple, but there is a lot more we want to do over time … and this funding allows us to reach that next level of what we can offer to consumers.”
Petal’s CEO Jason Gross told TechCrunch that a major objective for this round of funding was customer expansion and feature development. “The card is really simple, but there is a lot more we want to do over time … and this funding allows us to reach that next level of what we can offer to consumers,” he said.
Joining Valar in this round were previous investors Third Prime Capital, Rosecliff Ventures, Story Ventures, RiverPark Ventures and Afore Capital as well as new investor Greyhound Capital, a VC firm with a focus on European fintech.
Gross sees this international expertise as an asset. “We are hoping to learn a lot about best practices globally,” he told TechCrunch.