Chukwudi Enyi - Afrikan Heroes

Nigerian Credit-recovery Fintech Bfree Lands $1.7m From Local Investors

January 8, 2022

Bfree, a Nigerian credit management fintech, has raised $1.7 million in a pre-Series A investment to expand globally and take advantage of the prospects in emerging economies, where digital lending apps have recently sprung up in droves.

4Di Capital, Octerra Capital, VestedWorld, Voltron Capital, Logos Ventures, and several other angel investors joined in the new round, bringing the total capital received by the Lagos-based business to $2.5 million after raising $800,000 in a seed round last May.

Bfree is using the funds to launch a big recruiting drive in Ghana, India, Uganda, Brazil, Colombia, Mexico, Russia, Poland, Pakistan, and Indonesia, among the 16 new markets where it will be operating. This is as the company expands beyond Nigeria, where it began operations in August 2020 before moving to Kenya in July of last year.

“We are going into markets with large populations, credit deepening and an underdeveloped regulatory environment, where a behavioral collection approach is likely to work,” Bfree co-founder and CEO, Julian Flosbach said.

*Julian Flosbach (CEO), Chukwudi Enyi (COO), and Moses Nmor (CPO) founded Bfree. Bfree is the author of this image.*

Why The Investors Invested

The startup has achieved considerable traction since its last funding. According to the company, it currently serves over 800,000 customers, the majority of whom are in Nigeria. It also claims that it has followed up with 1.1 million defaulters so far. By the end of next month, Flosbach expects the startup to have processed 1.4 million profiles.

Based in South Africa, 4Di Capital is an independent seed-and early-stage technology venture capital firm.

Based in Lagos Nigeria, Octerra Capital is a venture capital firm focused on impact investments.

Chicago-based VestedWorld is a venture capital fund focused on investing in companies in Ghana, Kenya, and Nigeria.

Led by Olumide Soyombo and Abe Choi, Voltron Capital is a Nigeria-based venture capital firm.

Logos Ventures was both a private equity and venture capital firm based in Jerusalem, Israel.

A Look At What The Startup Does

Following their first-hand experience working for digital lenders in Nigeria, Chukwudi Enyi (COO), Moses Nmor (CPO), and Flosbach (CEO) formed Bfree in August 2020 with the goal of developing better, ethical, and tech-inspired debt-collection tools and methods.

“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,” said Flosbach.

According to Flosbach, Bfree uses ethical debt collection standards and collaborates closely with defaulters to develop tailored settlement options, with the ultimate goal of enhancing repayment rates and customer satisfaction.

Ethical debt collection practices protect customers’ personal information during the collection process, provide for flexible repayment choices, and avoid excessive penalties such as late fees and debt-shaming (as is the practice with many digital lenders at the moment).

It presently collaborates with 30 lenders, including digital lenders, microfinance institutions, and banks. The startup creates defaulter user profiles using data provided by lenders and analyzes their data via an algorithm to forecast their behavior and offer the best collecting approach.

Bfree either refers customers to a self-service site, where they may set up new payment plans using their phone number, or follow up on their debt balance using automated communication (chatbots, callbots, or IVR technology) or direct calls, depending on their risk profile. The company also holds financial literacy campaigns on a regular basis.

Bfree has gained the services of prominent industry specialists, including CTO Konrad Pawlus, formerly of SALESmanago, and Yohan Theatre, formerly of investment management giant PIMCO, in preparation for its next stage of expansion. As the chief of data decision-making and financial engineering, Theatre takes over. The two will be part of the team that will lead the startup’s new business as it attempts to disrupt traditional finance by utilizing blockchain technology in secondary debt markets.

“Lenders in the US 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,” said Theatre.

“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,” he said.

Bfree credit Bfree credit

Kenyan Spend Management Startup Alvin Raises $740k Pre-seed Funding Round

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer

Nigerian Fintech Startup BFREE Secures Seed Funding Round

May 16, 2021

Fintech startups in Nigeria continue to attract investments, thanks to big events in the country’s startup ecosystem recently. After seven months in operation, BFREE, a Lagos-based fintech that focuses on improving consumers’ financial health through its tech-enabled credit management solution, has just raised an undisclosed amount of seed round.

Beta Ventures, based in Nigeria, led the seed round, which also included Launch Africa Ventures and GreenHouse Capital.

“We are really excited to have incredibly supportive investors. We are now using this support to scale our product and development team and to pilot the Kenyan market,” Chukwudiebele Enyi, COO of BFREE, said.

“We are really excited to help grow the first ethical credit management company on the continent. Efficient and user-friendly credit collection is an essential part of the credit value chain. BFREE is essential for the existing credit market, and it opens the door for significant credit deepening in Africa and any other emerging market,” said Ike Eze of Beta Ventures.

“The team is highly experienced in lending and is now solving a problem that they once faced themselves, which is something that we like a lot in founders,” he added.

Why The Investors Invested

Bunmi Akinyemiju, Founding Partner of GreenHouse Capital, said:

“Being a specialised fintech fund, we know the challenges around collections first hand. Within a few months, BFREE has been launching product after product and now already achieves 60% of total collections via non-human activities, gradually taking the risk of human liability out of the collections process. They are innovating at a point in the lending value chain that has been broken and long ignored. Their goal is to make collections more efficient and data-driven, and this is the essence of the role of a tech startup.”

Baljinder Sharma of Launch Africa added:

“As a leading pan-African specialist early-stage VC fund focused on venture-building through our global network of over 100 strategic C-suite advisors, mentors and investors, we knew we could add significant value to BFREE in their geographic expansion plans. BFREE is setting its eyes on East Africa next, where we see huge opportunities for their solution and a region where we can help it expand.”

A Look At What The Startup Does

BFREE’s solution aims to incentivize consumers who 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 behavior. It was established in the summer of 2020 by Chukwudi Enyi, Moses Nmor, and Julian Flosbach. Lenders benefit from higher repayment rates, and borrowers benefit from a better customer experience. Today, the company operates over 300,000 clients for the majority of Nigeria’s leading lenders.

(COO) Chukwudi Enyi described the startup’s journey as follows:

“All of us co-founders used to work in large digital lending fintechs in Nigeria, and collections were always a struggle. On the one hand, you have traditional collections companies that are not very scalable and have little transparency and accountability in their processes. And on the other hand, you have classic call centres that are a bit more scalable but not very effective and still have loopholes for misconduct. So we looked at the collection process to come up with a way to reinvent it from scratch to fix these challenges.”

CPO Moses Nmor, speaking about the startup’s business model, said:

“No legitimate customer takes out a loan with the intention of not repaying it; however, life does not always play out this way. When you look at the core reasons why customers cannot service their outstanding balances, you will quickly notice that loss of income and direct or indirect health emergencies are among the top reasons for default. We focus all of our product development to assist customers in a state of financial emergency. This is really what motivates us as a team. In the end, there are millions of consumers in personal debt in Africa, and no one is really focusing on helping them get back on their feet. With BFREE, we are changing that.”

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