Bfree, a Lagos-based credit management fintech, has raised $1.7 million in a pre-Series A round.
Octerra Capital, VestedWorld, Voltron Capital, Logos Ventures and 4Di Capital participated in the funding round, which brings the total capital raised by Bfree to $2.5 million. It raised $800,000 in a seed round last May.
With the investment, Bfree will expand to Ghana, India, Uganda, Brazil, Colombia, Mexico, Russia, Poland, Pakistan and Indonesia, launch a DeFi based secondary debt market instruments, allowing retail and institutional investors to invest directly into microfinance portfolios and lenders to offload some of their portfolio risk.
Julian Flosbach, Bfree's co-founder and CEO said, "We are going into markets with large populations, credit deepening and an underdeveloped regulatory environment, where a behavioral collection approach is likely to work"
"We saw that there was like a little bit of a breach in the value proposition of lenders — they are good at giving out loans, but the aftersales services of the credit market didn’t work as collections processes were inefficient and not user friendly", he said.
The startup is currently working with 30 credit institutions, including digital lenders, micro-finance institutions and banks. Using customer data provided by the lenders, the startup builds the user profiles of defaulters, and runs their data through an algorithm to predict their behavior and recommend the best collection method.
Depending on a customer’s risk profile, Bfree either directs them to a self-service platform, where borrowers set new payment plans using their phone number, or follows up on debt balance through automated communication (chatbots, callbots or IVR technology) or direct calls. The startup also regularly conducts financial literacy campaigns.
Founded in 2020 by Chukwudi Enyi, Moses Nmor, and Julian Flosbach, Bfree aims to incentivize consumers that have fallen behind on their credit repayments to sustainably clear their balances by deploying a combination of self-servicing solutions, communication automation, and human operations, supported by machine learning algorithms that cluster and predict customer behaviour.
Customers deserve lower cost of capital - we will make sure they get it! - Flosbach
Bfree expanded to Kenya as their first market outside of Nigeria in 2021. Bfree also hired Konrad Pawlus as CTO — bringing in over 20 years of engineering experience and having exited one of Europe's largest marketing automation companies, Yohan Théatre as Head of Decision Making & Financial Engineering. Avis O'Voss was brought in as head of finance and Femi Adeniji as country manager in Nigeria.