Nigerian Debt Collection Startup Bfree Secures $2.95 Million in Funding.

20 Mar 2024

Bfree, a Nigerian fintech company specializing in debt collection, has raised $2.95 million in a funding round led by Capria Ventures. This brings the company's total funding to $6.5 million, including a previously undisclosed bridge round of $1.1 million secured in 2023.

Bfree was founded in 2020 to revolutionize the debt collection landscape in Africa by offering a more ethical and automated approach. Initially, they focused on digital lenders who quickly adopted their technology. However, CEO Julian Flosbach revealed that their current focus is on banks, which now contribute 70% of their revenue.

"The pressure to increase margins forced us to raise prices or let go of smaller clients," explained Flosbach. "Banks, with their larger loan portfolios, offer a more sustainable business model."

Bfree's debt collection methods include a self-service platform for borrowers to manage payment plans and AI-powered chatbots and callbots for communication. They emphasize the humane treatment of borrowers and use data-driven approaches for collections.

While 92% of their interactions are automated, they maintain a call center for human interaction when needed. Additionally, they offer a loan collection management software (SaaS) called Workflow for companies with existing collection teams.

Bfree also has ambitious plans to create a secondary debt market in Africa. This marketplace would allow investors like hedge funds to buy non-performing loans (NPLs) from banks.

"We've developed an algorithm to value NPLs based on data analysis," said Flosbach. "This allows us to buy these assets from banks, taking the risk off their books." Bfree also offers banks analytics solutions to navigate the secondary debt market.

Susana García-Robles, managing partner at Capria Ventures, expressed confidence in Bfree's potential to transform credit collection in Africa. "Bfree is well-positioned to play a crucial role in improving financial accessibility and mitigating risk," she said. "We believe they will spearhead the creation of a secondary market for distressed assets on the continent."

This funding will enable Bfree to expand its services across Africa and develop innovative debt collection solutions.


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