News Alternative Lending Digital Banking

Peter Thiel leads Petal’s $35m funding, B2B data analytics division Prism Data spun off

The US open banking momentum is growing with lenders increasingly interested in alternative data sources to traditional credit bureau data.

ARTICLE10680-peter-thiel-leads-petals-35m-funding-spins-off-b2b-data-analytics-division-prism-data.jpg

Petal

Petal, a US credit card fintech, has raised $35m in a new funding round that will see its analytics arm Prism Data spun off as a separate company.

The cash raised in the round will be split between Petal and Prism Data.

Valar Ventures, Peter Thiel's venture capital outfit, led the new investment with participation from Story Ventures, Core Innovation Capital, and RiverPark Ventures, among others. 

The funding includes strategic investments from Synchrony and Samsung Next. 

New York-based Petal was founded in 2016, uses an alternative data approach to scoring potential customers. It uses ‘automated cash flow underwriting’, or bank transaction data, rather than traditional bureau scores.

This led it to form Prism Data, its B2B analytics business, which it is now spinning off following the new fundraise.

“The first wave of fintech was about inventing new approaches. We’ve seen this explosion in activity with companies testing out new models, technologies, and financial products,” said Jason Rosen, CEO and co-founder of both Petal and Prism Data. 

“Not every new experiment works. But for breakthrough technologies that have proven effective, like the cash flow underwriting we’ve developed at Petal and Prism Data, the time has come to expand to the mainstream,” Rosen said. 

“This has profound implications for financial inclusion, and we couldn’t be more excited to partner with forward-thinking industry leaders like Synchrony and Samsung to drive true innovation at scale,” he added.

Open Banking

The funding round demonstrates an uptick in sentiment towards open banking in the US. 

Industry watchers expect it to become easier for consumers to share their financial data in the coming years following new rules from the Consumer Financial Protection Bureau coming into effect.

Petal says it has now approved nearly 400,000 credit cards, with more than 100,000 new of these approved in 2022. It has also hit $80m of annualised revenue last year, with profitability expected in 2024.

More Like This