Valar Ventures, NFL's Kelvin Beachum Jr. help Petal raise $55 million in Series C
Petal, the credit card aimed at millennials and others with limited credit histories, has raised $55 million in a Series C as main street banks pull back on credit during the COVID-19 crisis.
The Series C was led by Peter Thiel-backed Valar Ventures and it was the firm’s third investment in Petal. One notable investor in the Series C was NFL Offensive Tackle Kelvin Beachum Jr., who recently signed a one-year contract with the Arizona Cardinals. Most recently Beachum, a Texas native, completed a three-year stint with the New York Jets.
Additional investors include The Gramercy Fund, Rosecliff Ventures, Afore Capital, RiverPark Ventures, Great Oaks Venture Capital, GR Capital, Nelstone Ventures, Abstract Ventures, Ride Ventures, Adventure Collective and Starta Ventures. The total equity funding raised to date now exceeds $100 million.
“We’re pleased to once again invest in Petal,” said James Fitzgerald, co-founding partner with Valar Ventures, in the press release. “They have created a better and more modern credit experience, and a game-changing technology platform that’s well-matched to these times. We’re happy to support them as they scale.”
The continued support by Valar Ventures is notable during a time when many banks have been pulling back on credit card lines, as well as closing unused credit cards as the country goes deeper into a recession caused by the COVID-19 pandemic. According to CompareCards, one-third of consumers’ credit limits have been reduced in the last 60 days as banks pull back on available credit. An additional 25% of consumers have experienced banks’ closing a credit card on them in the same period.
Petal is a startup that uses artificial intelligence to target consumers with limited or no credit histories, typically millennials and Gen Z consumers as they are often new credit. Petal has found a niche among younger consumers who are often shunned by traditional banks that rely heavily on FICO scores and credit bureaus to evaluate potential customers. As a result, many younger consumers have turned to installment credit offered by companies such as Klarna, PayPal Credit, Affirm and Afterpay to make purchases.
“Traditional credit scores have become less reliable in the COVID economy, forcing mainstream banks to significantly scale back access to credit at a time when many people need it most,” said Jason Gross, co-founder and CEO of Petal in the release. “Cash flow scoring allows Petal to continue making credit available even in these volatile economic conditions.”
Having celebrities and athletes participate in venture capital fundraising has become more common in the last few years, as evidenced by rapper Snoop Dogg investing in Klarna, basketball star Kevin Durant investing in Postmates (recently acquired by Uber) and actor Will Smith’s venture firm Dreamers VC backing Public, a commission-free fractional investment trading app. Houston Texans NFL starJ.J. Watt also joined Will Smith in the investment into Public.
According to Crunchbase, a website that tracks investments in private companies, Petal has raised over $380 million in debt and equity in eight fund raising rounds since 2017.