Petal sold far below valuation
Petal
This sale showed how fast consumer credit fintech valuations reset once cheap funding disappeared. Petal was valued at $800M in January 2022, then spent 2023 raising more debt and equity while reports described a cash crunch, falling revenue, and an active sale process. By the time Empower bought the company in April 2024, the strategic value was mostly the card program, servicing stack, and customer base, not the old venture markup.
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Petal had real scale, with estimated revenue rising from $50M in 2021 to $100M in 2023, but that business depended on funding loans and carrying credit risk. When rates rose, the model got squeezed because capital became more expensive at the same time borrowers became riskier.
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The path into the sale was visible before the acquisition. Petal raised a $200M debt facility plus additional debt and equity in August 2023, then by November 2023 was reported to be seeking buyers amid doubts about viability and being short on cash.
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Empower was not buying a fast growing software asset. It was buying a regulated credit card issuer with underwriting models for thin file consumers, plus the ability to cross sell cards into its cash advance app. That usually prices closer to distressed financial M&A than peak venture rounds.
Going forward, this points to more fintech combinations where distribution companies buy credit infrastructure after the standalone lender can no longer fund growth on venture terms. The winners will be companies that own both cheap customer acquisition and durable balance sheet funding, because either one alone is no longer enough.