Bfree, a Nigerian Debt Recovery startup that leverages ethics and technology to lead customers out of debt has secured $1.7 million in Pre-seed funding to drive growth and expand operations across Africa and other continents.
4Di Capital, Octerra Capital, VestedWorld, Voltron Capital, Logos Ventures, and other angel investors participated in the Pre-series A fund round. So far, Bfree has raised a total sum of $2.5 million in funding, this included the $800,000 raised in a seed round in May 2021.
According to the company, the unsatisfied approach on the credit collection options and constant humiliation of customers is one of the problems Bfree is solving. The company’s co-founder and CEO Julian Flosbach said, “inefficiency and lack of transparency of collections are not unique challenges to digital lenders and also not peculiar to Nigeria. We see significant use cases among other customer verticals with digital products such as commercial and microfinance banks, embedded finance solutions, like buy-now-pay-later, credit cards, and even tax payments at some point. Basically, everywhere where value is owed, our solutions can be deployed. Here, we also don’t just build a solution for Nigeria, but a solution that can be potentially used in every emerging market with a challenging infrastructure for collections”.
Bfree was founded in 2020 by Juliana Flosbach Co-founder/CEO, Chukwudi Enyi co-founder/COO, and Moses Nmor co-founder/CPO.
Following the fund raised, Bfree plans to embark on massive recruitment as it expands to new markets in Ghana, India, Uganda, Brazil, Colombia, Mexico, Russia, Poland, Pakistan, and Indonesia.
Speaking on the company’s expansion, Julian 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.”
Bfree currently handles over 800,000 customers compared to 300,000 customers the company reported in May 2021.
Yohan Theatre, Bfree head of decision sciences & financial engineering said, “Lenders in the U.S. or in Europe have the opportunity to sell significant chunks of their debt portfolios to third parties. This means they only carry a portion of the risk of the loans they issue. In emerging markets, this is typically not the case. Lenders have to carry the entire credit risk on their own. A key driver for this difference lies in higher transaction costs and contractual uncertainties.
“The arrival of DeFi (decentralized finance) is a game-changer: transaction costs can be slashed while contractual certainty is increased by smart contracts. These are some of the risk-sharing instruments that we are now actively providing to lenders and borrowers”.
