Nigerian startup Bfree gets $3M to expand.

Bfree, a startup in Nigeria focused on debt collection, has successfully raised $2.95 million in funding, led by Capria Ventures along with contributions from Angaza Capital, GreenHouse Capital, Launch Africa, Modus Africa, Axian CVC, and several angel investors. This funding round brings their total raised amount to $6.5 million, including a previous undisclosed bridge round of $1.1 million.

The CEO and co-founder, Julian Flosbach, stated that although Bfree initially targeted digital lenders, they now primarily focus on banks, which account for up to 70% of their revenue. This strategic shift was driven by the need to improve margins, leading them to prioritize larger clients over smaller ones.

Since its establishment in 2020, Bfree has introduced various debt recovery methods, including a self-service platform for borrowers to set up payment plans and conversational AI tools like chatbots and callbots. These tools aim to provide humane after-sales services based on borrower behavior and financial data. While 92% of customer interactions are automated, Bfree maintains a small call center for situations requiring human assistance.

Additionally, Bfree launched Workflow, a loan collection management SaaS tailored for companies with in-house collection teams or those hesitant to outsource. With a current loan portfolio exceeding $400 million, Bfree has successfully collected 12.5% of the outstanding amount.

Looking ahead, Bfree plans to establish a secondary debt market, enabling third-party investors such as hedge funds to purchase non-performing loans from African banks. By leveraging data analytics and generative AI, Bfree aims to predict the likelihood of loan repayment and provide insights to banks seeking to navigate secondary debt markets effectively.

Susana García-Robles, managing partner at Capria Ventures, expressed confidence in Bfree’s potential to revolutionize credit collection in Africa, citing the company’s partnerships with top-tier banks and fintech firms. She emphasized the role of generative AI in facilitating cost-effective scalability and enhancing accessibility in financial services.

Also read: d.light secures $7.4 million in financing to expand in Nigeria