London-based debt collection startup Ophelos has raised $2.3 million in pre-seed investment co-led by Connect Ventures and Fly Ventures. The company reports that the pre-seed investment will be used to continue building out its debt management platform, namely via upping the engineering and customer operations teams.
Founded in 2019 by Amon Ghaiumy, Paul Chong, and Prof. Qingchen Wang, Ophelos is taking on the archaic, $24 billion debt collection industry through a series of strategic partnerships that help businesses improve customer relationships.
The startup leverages AI and behavioural science techniques to optimise customer communications, offer alternative debt repayment plans and achieve more accurate vulnerability detection. WIth customers more likely to engage with these communications, businesses are more likely to recoup overdue debts.
Let’s face the facts: while there have been a series of winners over the past 15 months, there have also been a lot of losers. In the UK alone, nearly 9 million people are over-indebted, approximately 250,000 small businesses are expected to close once Covid-related support programmes end, and roughly 6 million adults have fallen behind on at least one household bill during the pandemic.
This means that organisations are going to come looking for their money. And as we’ve seen in a striking number of industries, the old-world as we knew it is, literally, history. So why should the collection industry rest on its laurels? Or rather, I should say, why should creditors rely on the painfully-so-to-adapt collection industry?
And this is exactly where Ophelos enters, stage right.
The startup reports that initial results with launch clients have seen a 24% increase in debt recovered, a 28% reduction in costs for businesses, and customer engagement up by 68%.
Through engaging Ophelos, businesses gain insights gathered through digital affordability assessments and vulnerability detection via open banking to help them better understand the financial health of their customers, and machine learning-driven pattern analysis is employed to detect regulatory and compliance risk.
“We started Ophelos to create customer-centric products and services that nurture financially healthy and trusted relationships between consumers and businesses. The debt collection industry felt like a natural starting point because it allows us to understand, diagnose and address many of the underlying issues surrounding financial health. It’s also an industry in desperate need of change towards a more technology-driven, and most importantly, customer-centric approach,” comments CEO Ghaiumy. “We want to create a world where everyone is financially educated, empowered and equal -- reimagining the debt collection industry is just a first step towards our larger goal.”