Empower to acquire Petal, completes acquisition of Cashalo

On Monday, Empower Finance announced it would be acquiring Petal, a consumer credit card and financial technology company in New York, on the heels of acquiring Cashalo, a consumer credit and lending company in in the Philippines.

Empower is a leader in alternative credit underwriting, and the acquisitions position it in the U.S. credit card category, as well as the Southeast Asian credit market. Empower is now in a position to revolutionize lending with a smarter, more inclusive approach to underwriting, officials said. Petal and Cashalo will fold into Empower, officials said.

“In both companies, we found a shared commitment to harnessing technology and rich alternative data to unlock financial opportunity for more people who merit our consideration. I’m confident that by merging Petal and Cashalo into Empower, we amass new product, operational, and analytical capabilities to help alleviate the credit insecurity that billions of people around the world struggle with,” Warren Hogarth, co-founder and CEO of Empower said.

Empower underwrites individuals abased on real-time cash flow, other nontraditional data and machine learning to assess financial responsibility and credit risk, officials said. It proprietary underwriting coupled with its unique credit products allow it to offer lines of credit, issued by FinWise Bank, Member FDIC, to consumers who might otherwise have had minimal access to liquidity. Empower has 2 million active subscribers and achieved profitability in 2022.

Officials said Petal has pioneered access to high-quality Visa cards that allow individuals to use their open banking data to qualify for credit and establish credit history.

“Safe, affordable credit is unavailable to tens of millions of consumers in the U.S. and billions worldwide. We believe that modern product design and new technologies like cash flow underwriting can be used to radically improve credit access around the world,” Jason Rosen, Petal’s co-founder, said. “This merger brings together two of the leading innovators in this arena. 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.”

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