Cardless Startup Announces $30M Funding Round, Could Small Businesses Tap In?

There is also speculation that the cards from Cardless could be a way for small and medium sized businesses to solve potential problems posed by impending tariffs from the Trump administration.

On Nov. 26, Cardless, a San Francisco-based startup that operates a series of co-branded credit cards in collaboration with Alibaba, Qatar Airways, LATAM Airlines, Simon Property Group, and American Express, announced it had received $30 million in funding, led by Activant Capital.

According to Michael Spelfogel, the co-founder and president of Cardless, “Over the last 12 months, we’ve been able to design products for some of the best brands in the world, including Qatar Airways and Alibaba,” Spelfogel said.

He continued, “These brands chose us because of our differentiated approach to the entire co-branded card experience. From embedded servicing to leveraging a brand’s data for personalized sign-up offers, Cardless delivers an experience that other cobrand-focused banks and fintechs cannot match. We’ll use this funding to further build out a world-class team, enabling us to scale both new and existing programs.”

According to TechCrunch, the company will not disclose its exact valuation, including whether or not the new round of funding represents an increase, a decrease, or a stagnant valuation relative to its last valuation, just north of $350 million released in 2021.

There are also competing narratives surrounding the company; TechCrunch reports that the cards could be used to disrupt the branded card space, but not necessarily from the consumer side of the market.

This narrative is one that Andrew Steele, the co-founder of Activant Capital, seems to be bullish on.

Activant Capital led the $30 million fundraising round for Cardless alongside Mischief, Industry Ventures, Thayer Ventures, Assurant, and Amex Ventures.

“Cardless is attacking one of the largest markets in fintech that has historically been woefully underserved,” Steele said.

Steele continued, “Before Cardless, the largest brands in the world had been unwilling to launch credit cards because the customer experience provided by cobrand-focused banks didn’t meet their standards. Cardless has been able to take the industry head-on and launch cards with some of the most sought-after brands on the market. Cardless has built the only embedded platform capable of servicing both consumers and SMBs, and we’re excited to double down as they continue to scale large programs for some of the best companies in the world.”

NerdWallet notes in its reporting that consumers who often utilize the services of the connected airlines or other businesses connected to the cards, like Qatar Airways or Simon Malls, JCPenneys, or Reebok, among others, will find greater use for the cards than others.

There is, however, one caveat for the cards: a cardholder can only ever be issued one card, even if a previous card from the company has been closed.

There is also speculation that the cards from Cardless could be a way for small and medium-sized businesses to solve potential problems posed by impending tariffs from the Trump administration, per Spelfogel’s comments in the press release.

“Our experience across the airline sector has shown us how to tailor solutions effectively, and we’re now applying that expertise to help small and medium-sized businesses overcome their unique challenges,” Spelfogel said.

According to Fast Company, under Trump’s proposed tariffs, small businesses may be in for a turbulent four years, ranging from disrupted supply chains, elevated labor costs, reduced profit margins, and labor shortages.

According to Yega Tita-Costia, a Pittsburgh-based Black small business owner, the tariffs could leave businesses like her Yeremiah’s Sisters Beauty Supply as a casualty of Trump’s trade wars.

“I think us small businesses are a casualty of war, and nobody is really thinking about the effects it’s going to have on us and our families, and even just the communities,” Tita-Costia told CBS News.

She continued, “Ninety percent of the products in here that we have in this store come from China. To go from paying $250 to $300 on a $4,000 order, to pay almost $1,300, and not even for 1,300 pieces, that’s over a dollar adding to the price of each piece.”

Tita-Costia concluded, “We’ll either have to take the hit and maybe push a little bit onto our customers, but it’s going to be a drastic change.”