Bfree, a Nigerian tech-enabled debt collection startup that offers an ethical alternative to aggressive money retrieval techniques, raised almost $3 million in fresh funding in a round led by Capria Ventures.
To scale up its tech-driven alternative to predatory debt-collecting techniques like incessant calling, threats and debt-shaming, Nigerian startup Bfree has just secured a $2.95 million funding round that brought the total funding raised by the company to $6.5 million.
Fresh investments came from Capria Ventures, Angaza Capital, GreenHouse Capital, Launch Africa, Modus Africa, Axian CVC and several angel investors.
Founded in 2020, Bfree offers a few scalable debt recovery methods such as a self-service platform, borrowers’ ability to set up new payment plans, conversational AI tools (chatbots and call bots), messaging automation, distressed asset purchase, and more.
The startup also provides a SaaS loan collection management solution Workflow, aimed at companies with in-house collection teams or those not keen to outsource.
Since the startup started its operations, its customer base has shrunk from 45 to 13 customers. However, fewer lender customers don’t mean smaller loan portfolios under management. In fact, the company has recently expanded its portfolio to include some of the major banks in Ghana, Kenya and Nigeria.
Today, Bfree shifted its focus from digital lenders, which are quick to adopt innovative products, to banks, which contribute up to 70% of the company’s revenues and have larger loan portfolios compared to digital lenders. At the same time, traditional banks may be more likely to employ old-fashioned aggressive debt collector services which degrade overall customer service.
Bfree claims that 92% of its interactions with customers are fully automated. However, the startup still has a small call centre for follow-ups that require phone calls. Such an approach is not typical of the general African debt-collection segment which heavily relies on traditional call centres.
While not all financial companies are adopting an ethical approach to debt collection, it is important for consumers to understand their rights during debt settlement negotiations.
