Credit Builder Petal Raises $35 Million, Spins Off Prism Data
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Credit Builder Petal Raises $35 Million, Spins Off Prism Data

The credit-building credit card FinTech Petal has announced a fresh round of funding and a big change to their business. First, the company disclosed that it’s raised $35 million. The new funding was led by Valar Ventures with Story Ventures, Core Innovation Capital, and RiverPark Ventures participating as well. Strategic investments from Synchrony and Samsung Next were also included. To date, Petal has now raised nearly $300 million in equity capital, including a $140 million Series D in January 2022.

With the announcement of new funding, Petal also revealed plans to spin off its data infrastructure and analytics subsidiary Prism Data. Known for creating the CashScore underwriting algorithm that Petal uses to approve new customers, Prism will now offer such open banking data solutions to a variety of businesses. According to Petal, using Prism’s technology, institutions, fellow FinTechs, and other businesses will be able to move beyond traditional FICO scores and make better credit decisions overall.

In a press release announcing the spin-off of Prism Data, the CEO and co-founder of both Prism and Petal Jason Rosen explained, “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.”

Rosen continued. “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. 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.”

Also commenting on the shift, Synchrony EVP and Chief Strategy Corporate Development Officer Trish Mosconi stated, “At Synchrony, we have a deep history of using data to make informed lending decisions and create faster, seamless personalized customer experiences. The Prism Data platform is innovative in providing differentiated consumer insights, enabling financial institutions to make more data-driven decisions. We look forward to exploring partnerships with Petal and Prism Data to help improve access to credit.”

My Thoughts:

Petal’s move to spin off Prism Data follows a now well-established trend in FinTech that finds firms pivoting from consumer-facing services to playing “behind the scenes” or B2B roles. This has been seen recently in companies such as Aspiration (moving from an environmentally-conscious consumer credit card toward offering carbon credits to businesses) and Bakkt (which sunsetted its own consumer crypto platform to power other integrated offerings).

Of course, the difference here is that Petal is seemingly sticking with its current products while also peddling its proprietary underwriting model to others. Ultimately, this hybrid approach could pay off for the firm — and apparently already has given the fresh investment. In turn, both Petal and Prism are now FinTechs to watch in the future.

Author

Kyle Burbank

Head Writer ~ Fioney
Kyle is the head writer for Fioney. He is a personal finance nerd, constantly looking for new apps and services to test and incorporate into his own financial game plan. In addition to his role at Fioney, he's written for other publications including Born2Invest, Lifehack, and Laughing Place, as well as his own site Money@30. He also creates personal finance and travel-related videos for Fioney's YouTube channel, which has garnered more than 2 million views. Currently, Kyle resides in Springfield, Missouri with his wife of 10 years. Together, they enjoy traveling (including visiting Disney Parks around the world), dining, and playing with their dog Rigby.

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