Empower Signs Deal to Acquire Petal, Completes Purchase of Cashalo

Empower Finance plans to acquire Petal and has completed its acquisition of Cashalo.

These acquisitions will expand Empower’s credit offerings to new markets in the United States and Southeast Asia, the company said in a Tuesday (April 9) press release.

Empower provides alternative credit underwriting and financial products for underserved consumers in the U.S. and Mexico, according to the release.

Its planned acquisition of Petal, a New York-headquartered consumer credit card and FinTech company, will expand Empower’s products to include the credit card category in the U.S., the release said.

Empower has entered into a definitive agreement to acquire Petal and expects the acquisition to close by the end of the second quarter, per the release.

It was reported in November that Petal was seeking a buyer amid doubts about its viability and had received multiple acquisition offers. Consumer lenders like Petal had been hurt by high interest rates driving up the cost of borrowing, the report said.

Empower’s acquisition of Cashalo, a Philippines-headquartered consumer credit and lending company, will enable Cashalo to enter the Southeast Asian credit market, according to the Tuesday press release.

“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,” Warren Hogarth, co-founder and CEO of Empower, said in the release. “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.”

Modern product design and new technologies can provide solutions for the tens of millions of people in the U.S. and billions around the world who do not have access to safe, affordable credit, Petal Co-founder Jason Rosen said in the release.

“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,” he said.

PYMNTS Intelligence found that 31% of U.S. consumers are credit insecure. About 80 million individuals lack access to credit, have fewer options to repair their finances and risk opting out of credit altogether, according to the report “How Credit Insecurity Is Changing US Consumers’ Borrowing Habits.”