Credit card fintech Petal secures $200m debt facility from Victory Park Capital
New York-based fintech Petal has tapped into new funding sources as it maps its plans for expansion.
Petal secures $200 million debt facility
The credit card start-up has secured a $200 million debt facility from Victory Park Capital (VPC) and a new term loan facility for up to $20 million of incremental commitments with Trinity Capital.
In addition, it has also raised $20 million in new equity financing from its existing investors. The capital raise follows its Valar Venture-led funding round in May, when it raised $35 million. To date, the fintech has raised $300 million in equity capital and more than $450 million in debt financing.
Petal says it will use the fresh funding to further develop and expand its credit card programme.
During a period when credit rejections are at an all-time high, Petal’s credit card programme enables users to create a credit history by using their banking history to qualify for credit through cash flow underwriting.
The company aims to take a wider, more holistic view of a user’s spending patterns and financial history to determine their creditworthiness, while offering WebBank-issued Visa credit cards.
So far, the company has approved nearly 400,000 people for these cards, with 100,000 people approved last year alone. Petal says the majority of its users had either thin or no credit history when they were first approved for the programme, with 40% experiencing a prior credit rejection from a major bank.
“It will soon be possible for any US consumer to use their banking history to qualify for new and better financial services,” Petal’s CEO and co-founder, Jason Rosen, says.
“That’s great for consumers, and an opportunity for Petal to make credit accessible to millions of people who have been overlooked and underserved for too long.”
