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Co-branded credit card startup Cardless gets $75M credit line

May 16, 2023
Illustration of a hundred dollar bill being slid through a credit card machine.

Illustration: Aïda Amer/Axios

Cardless, a San Francisco-based co-branded credit card startup, secured a new $75 million credit facility from i80 Group.

Why it matters: The warehouse facility enables Cardless to expand its lending capabilities in an otherwise challenging interest-rate environment.

How it works: Cardless works with consumer-facing brands like sports franchises, retail companies and airlines to launch credit card reward programs.

  • It uses brand partners' data to help underwrite customer accounts and provides the backend technology to manage them.

Flashback: Cardless got its start working with sports franchises like Manchester United and Liverpool FC to create their credit card rewards programs.

  • More recently, it expanded into travel and retail by launching credit cards with Latam Airlines — the largest airline in Latin America — and Simon Property Group, which manages 400 retail centers around the world.
  • Along the way, it's also partnered with — and secured a strategic investment — from American Express.

Between the lines: The company was able to raise the warehouse facility in a challenging credit environment.

  • "This is one of the quickest rate-rising environments that we've ever seen... and that puts all sorts of pressures in different places in the system," Cardless president Michael Spelfogel says.
  • But with its expansion into new verticals, Cardless needed a greater ability to extend credit to customers of its credit card partners.
  • "It allows us to fund loans in a more economically feasible way, and then ultimately pass on that value and that savings to customers," Spelfogel says.

Of note: Cardless has raised $50 million in equity financing from Activant Capital, Greycroft, Accomplice, Pear VC and others.

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