Bfree, a Nigerian startup that deals with debt collection, has received a backing of $3 million, News About Nigeria reports.
The CEO, Julian Flosbach, who co-founded the startup with Chukwudi Enyi, COO, and Moses Nmor, CPO, disclosed this, stating that the company started out with digital lenders, has expanded, and now focuses on banks, which contribute up to 70% of revenues.
He noted that this is due to the immense pressure to increase their margins, stating that they were faced with the choice of either increasing pricing or letting go of a lot of smaller customers.
He added that it makes business sense to work with banks because of their large loan portfolios compared to digital lenders.
He further disclosed that the startup currently serves 14 customers, although it has worked with 45 since its launch in 2020.
He stated that the startup recently secured $2.95 million in fresh funding in a round led by Capria Ventures, Angaza Capital, GreenHouse Capital, Launch Africa, Modus Africa, and Axian CVC.
He added that several angel investors also participated in the round, bringing the total funding raised to $6.5 million, including last year’s undisclosed $1.1 million bridge round.
“The startup also plans to create a secondary debt market, to allow third-party investors like hedge funds, looking to diversify their investments, to buy non-performing loans (NLPs) from banks in Africa. Debt buyers purchase loans from banks at a fraction of the debt’s face value and make profits from collection. Banks sell NLPs to minimise their risk, manage loan portfolios, and free up funds,” he stated.
