American startup Petal has raised $34m in new funding round led by investment bank Jefferies and Silicon Valley Bank to introduce a new Petal credit card for people without credit scores.
The Petal Credit Card is available with no fee and low variable interest rates.
The new Visa credit card is not based on conventional credit scores. It uses ‘cashflow underwriting’ process to analyse an applicant’s complete digital financial record.
Breaking into the US fintech card sector
Petal CEO and co-founder Jason Gross said: “Tens of millions of Americans have no credit score at all. Millions more have short credit histories that may not tell their entire financial stories.
“That’s a problem, since building credit is a necessity for many of life’s most important milestones, like buying your first car, starting a small business, or purchasing a home.”
The company further added that more than 100,000 customers have joined its waitlist for the Petal credit card. Petal intends to use the new funding to meet this demand.
In January this year, the firm raised $13m in an effort to bring its no-fee credit card to people without credit history such as millennials and the underbanked.
Petal also developed a mobile app to facilitate easy management of finances and tracking of spending. Cardholders will also receive timely payment reminders and can choose to automate their payments.