San Francisco’s Empower Finance Inc. said Tuesday it has reached an agreement to acquire Petal, a consumer credit card and fintech company that has its customer-facing base in the Richmond area.
Terms of the deal were not disclosed. Empower said it expected the deal to close later in the second quarter, at which time Petal will be merged into Empower’s business.
New York-based Petal made its name giving customers access to Visa credit cards that don’t require a credit score for qualification. Instead, those cards are issued via cash flow underwriting, a process that allows customers to use their banking data to qualify for credit and establish a credit history. Since 2018, nearly 400,000 have been approved for Petal credit cards, which are issued by WebBank.
Petal has raised nearly $300 million in equity funding since its founding in 2016. One of its backers includes Peter Thiel's Valar Ventures. Petal tapped Goldman Sachs Group Inc. to advise on a potential sale, according to media reports from November.
Empower, a big player in the alternative credit underwriting and cash advance space, said the deal gives it a strategic foothold in the credit card market.
"This merger brings together two of the leading innovators [in credit access],” Petal co-founder Jason Rosen said in a statement. “Our combined product offerings, financial strength, technical capabilities and global reach will allow us to move much faster to close the equity gap in credit."
Petal stood up its customer operations hub in the Richmond area in 2019. It built out an office in Chesterfield to manage all of its customer support, credit operations and quality assurance. Today, the company says it keeps dual headquarters in New York and Richmond.
A Petal spokesperson said there are no changes planned to the company's Richmond operations because of the acquisition. Empower will continue to service Petal’s existing cardholders and acquire new ones once the transaction closes, the spokesperson said.
Empower also said Tuesday it closed its acquisition of Cashalo, a fintech platform that delivers credit to unbanked Filipinos.
