Empower Finance strikes deal to buy Petal with Cashalo acquisition completed
Empower Finance, a US-based credit underwriter, has entered into a definitive agreement to acquire Petal, a credit card and financial tech enterprise, having completed its purchase of Cashalo, a consumer credit and lending firm based in the Philippines.
Empower Finance to acquire Petal for undisclosed sum
The deal for Petal – set to be finalised later this quarter for an undisclosed sum – will broaden Empower’s product offerings to encompass the credit card category within the US market.
It follows speculation last November, as first reported by Fortune, that Petal was in the market for a buyer. Without finding a suitor, the company reportedly faced the risk of closure.
Formed in 2016, Petal offers access to Visa credit cards without needing a credit score, allowing individuals to leverage their open banking data to qualify for credit.
Its non-traditional methods of assessing credit risk are comparable to those deployed by Empower, which leverages machine learning to analyse real-time cash flow data during the underwriting process.
The San Francisco-headquartered underwriter intends to integrate its two recently-acquired companies into its network, emphasising that they provide “strategic footholds” in the US credit card sector and the credit market in Southeast Asia, respectively.
Commenting on the purchases, Warren Hogarth, co-founder and CEO of Empower, claims that merging Petal and Cashalo into its ecosystem will “amass new product, operational and analytical capabilities”, which will help “alleviate the credit insecurity that billions of people around the world struggle with”.
Jason Rosen, Petal’s co-founder, believes that Empower and Petal’s “combined product offerings, financial strength, technical capabilities and global reach” will enable the duo to move faster in closing the “equity gap in credit”.
