The Australian FinTech InDebted announced it has raised A$14 million ($9 million) in its Series A funding round, co-led by venture capital firms Carthona Capital and MassMutual Ventures Southeast Asia, with participation from Reinventure.
“Our Series A is a testament to the amazing work our team puts in every day to deliver on our mission to erase the stigma of debt collection and to fulfill our vision to empower through financial fitness,” InDebted Founder Josh Foreman, who founded the firm in 2016, said in a blog post.
On the heels of one of the largest venture capital rounds seen in the Australian FinTech space this year, Foreman plans to utilize machine learning (ML) “to humanize the way clients interact with customers who owe them money.”
"The collections industry has historically not paid any attention to customer experience, but we're showing that treating people like humans actually improves collection rates,” he told Financial Review.
InDebted has processed over $1 billion of debt owed by 250,000 people, and indicates that its recovery rate is an average of 43 percent higher than other collections agencies.
"We believe InDebted is leading a complete revolution of this industry. We’re incredibly excited to have joined the talented team at InDebted," said Carthona Capital Partner Dean Dorrell. “This is bigger than debt collection – we're building a platform for financial fitness.”
According to InDebted, the company strives to connect with customers by listening to people’s stories and understanding their pain points. Foreman said they have “productized” debt collection.
"InDebted is leading the way in bringing radical change to the debt collection industry, with a focus on helping customers get back on their feet and improve their financial well-being,” said MassMutual Ventures SEA Managing Director Ryan Collins. “We are looking forward to joining them on their journey.”
The U.S. Consumer Financial Protection Bureau (CFPB) is taking steps to confine old debt – known as “zombie debt” – and to make it harder for debt collectors to attempt to revive it. Zombie debt is debt that a consumer legitimately owed, but that has passed the statute of limitations for when it can be collected in a court and/or has passed the duration of time it can be reported to credit reporting bureaus.