Sometimes raising venture capital can be as simple as talking to your existing investor and having them wire over another check.
When we last-place caught up with Petal in January 2019, the startup was hot off its $30 million Series B round and was accelerating its mission to take on the world of credit cards. Petal’s core differentiation is the fact that it looks at the cash flow of potential borrowers rather than traditional recognition values to assess creditworthiness, helping to identify underbanked customers who have the ability to be trusted with a credit card, but shortcoming the formal statistics to prove it.
Well, a lot has happened since then. COVID-1 9 hitting, and along the way, the traditional approval compose has been rent asunder as millions lost their jobs, had their hours cut back, and reformed life occasions. At the same time, federal stimulus relief in the form of direct payments to taxpayers actually preceded some credit compositions to increase during the pandemic. All of this is to say that underwriting based on prospective cash flow has been a bit more attuned to reality rather than credit compositions based on retrospective history.
Now, the New York City-headquartered startup is expanding, and webbed a $55 billion dollars Series C round to be provided by Valar again, who not only guided the company’s Series B, but also its $ 13 million Serials A round back in 2018. This Series C round closed in April just after the COVID-1 9 pandemic come amply underway and is officially being announced today.
Valar, one of the many vehicles in the Peter Thiel capital universe, has staked its allege in the fintech world, backing companionships like Even, Stash, N26, BlockFi, Point Card, and Taxfix. I expected Petal CEO Jason Gross his thoughts on why he took capital from his existing investors two more goes, and his way was “if you’ve heard the face,’ if it ain’t shatter don’t fix it.’” He continued, “Our view has been that if we already have a really great working relationship, and a lot of support and a dynamic that’s been successful in the boardroom, there’s no reason to necessarily modification that.”
Gross said that the company’s model has allowed it to handle the storm of changes that have been underway this year. “It’s allowing us to meet recognition accessible at a reporting period when legacy conservatories — traditional banks and so on — are being is necessary to to move back, ” he said. “We’ve been able to continue to accurately understand what’s going on with financing of the all cases of our customers and applicants” allowing the company to “lean in” this year.
He observed the company has brought on “tens of thousands of customers” since the last time TechCrunch chitchatted with the company.
Outside of fundraising and client growth, the company has been hectic. It propelled a second office in Richmond, Virginia last year. It “has a really strong, kind of vibrant and surfacing technology scene. It is the largest concentration of colleges in Virginia, and it also is a financial-services-heavy location, ” Gross asked. Conveniently, it also shares the same time region as NYC.
Back last September, the company caused $300 million from Jeffries as a obligation facility to busines its credit cards, and in February, it banked Kaustav Das as its new principal probability officer. Das came from small business loan platform Kabbage, which was sold to American Express earlier this year following the ponderous financial jolt from the pandemic to small businesses across the country.
Petal is now about 100 hires, and the company has been operating perfectly remotely since March. Gross says his goal for the next two years is to onboard “hundred of thousands of brand-new customers.”
In addition to Valar, a huge miscellany of stores participated in the round, including” Rosecliff Ventures, Afore Capital, RiverPark Ventures, Great Oaks Venture Capital, GR Capital, Nelstone Ventures, Abstract Ventures, Ride Ventures, Gramercy Fund, Adventure Collective, Starta Ventures, and NFL star Kelvin Beachum, Jr .” The company have already had raised the question as to $100 million of equity capital all together.
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