In a groundbreaking move to transform debt recovery practices across Africa, Bfree, a Nigerian tech-enabled debt collection startup, has successfully raised $2.95 million in a funding round led by Capria Ventures. This recent investment brings the total funding for the company to $6.5 million, including last year’s undisclosed $1.1 million bridge round.
Founded in 2020 by Julian Flosbach (CEO), Chukwudi Enyi (COO), and Moses Nmor (CPO), Bfree emerged with a mission to automate and introduce ethical debt recovery processes. The founders were inspired to address the adverse effects of aggressive retrieval techniques, such as incessant calling and debt-shaming, commonly employed by predatory digital lenders.
While Bfree initially collaborated with digital lenders, the startup has strategically shifted its focus to major banks in Ghana, Kenya, and Nigeria. This shift is fueled by the recognition that banks contribute up to 70% of revenues and possess larger loan portfolios compared to digital lenders.
Bfree has introduced a range of scalable debt recovery methods, including a self-service platform empowering borrowers to set up new payment plans. The startup has also incorporated conversational AI tools, such as chatbots and callbots, as part of its collections-as-a-service offering. These innovative tools ensure humane after-sales services for borrowers, taking into account behavioral and financial data.
| Investors | Amount (USD) |
|---|---|
| Capria Ventures | $2.95 million |
| Angaza Capital | Participated |
| GreenHouse Capital | Participated |
| Launch Africa | Participated |
| Modus Africa | Participated |
| Axian CVC | Participated |
| Angel Investors | Participated |
Bfree proudly states that 92% of its customer interactions are fully automated, leveraging cutting-edge technology. However, the startup maintains a call center, staffed by a small team, to handle customer inquiries and provide necessary follow-ups that require human intervention.
Bfree’s current loan portfolio stands at an impressive $400 million, with successful collections amounting to 12.5%. Looking forward, the startup has ambitious plans to create a secondary debt market, allowing third-party investors like hedge funds to buy non-performing loans (NPLs) from African banks.
Julian Flosbach, Bfree’s CEO, highlights the company’s unique ability to collect and analyze data of defaulting borrowers. Bfree has developed an algorithm that predicts the likelihood of repayment for loans that have not been paid back, enabling them to purchase these assets from banks and effectively manage risk.
Susana García-Robles, managing partner at Capria Ventures, expressed confidence in Bfree’s potential to transform credit collection in Africa. García-Robles believes that Bfree, with its generative AI capabilities, will play a crucial role in improving accessibility and mitigating risk in financial services. The investment firm foresees the emergence of a secondary market for distressed assets in Africa, spearheaded by Bfree.
As Bfree diversifies its offerings and explores innovative debt recovery solutions, the startup has made a strategic decision to slow down its aggressive expansion plans. This shift reflects a nuanced understanding of varying market dynamics and the realization that each market requires tailored approaches and products.
Bfree’s recent funding injection and strategic focus on major African banks position it as a trailblazer in reshaping debt collection practices on the continent. As the company continues to innovate and expand, it aims to create a lasting impact on the financial services landscape in Africa.
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