July 16, 2024

Empower Finance completes the acquisition of Cashalo and reaches a contract to purchase Petal.

April 12, 2024
1Min Read

After completing the acquisition of Cashalo, a consumer credit and lending company located in the Philippines, Empower Finance, a US-based credit underwriter, has reached a final agreement to purchase Petal, a credit card and financial tech company.

The purchase of Petal, which is expected to finalize later this quarter for an unknown amount, would expand Empower's product line to include credit cards in the US market.

It comes after rumors from November of last year, which Fortune was the first to reveal, that Petal was looking for a buyer. The business apparently ran the risk of going out of business if it didn't find a buyer.

Founded in 2016, Petal provides access to Visa credit cards without requiring a credit score, enabling anyone to obtain credit by using their public banking information.

Its unconventional approaches to evaluating credit risk are similar to those used by Empower, which analyzes real-time cash flow data throughout the underwriting process by using machine learning.

The insurer with its headquarters in San Francisco plans to incorporate the two newly acquired businesses into its network, highlighting the fact that they offer "strategic footholds" in the credit markets of Southeast Asia and the United States, respectively.

Warren Hogarth, co-founder and CEO of Empower, has commented on the acquisitions and says that integrating Petal and Cashalo into its ecosystem will provide "a mass of new product, operational, and analytical capabilities" that will assist in "reducing the credit insecurity that billions of people struggle with globally."

Empower and Petal, with their "combined product offerings, financial strength, technical capabilities and global reach," according to co-founder Jason Rosen of Petal, would help them close the "equity gap in credit" more quickly.

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