Sydney debt collection fintech InDebted has secured “just under” $1 million in seed funding, led by Westpac’s Reinventure venture capital firm.
The deal marks Reinventure’s 15th startup investment, with the VC’s general partner Kara Frederick saying the debt collection industry is still dominated by “archaic” and “manual” work processes.
“From snail mail to phone calls, numerous niche providers use outdated models for debt collection,” said Frederick, who will join the board of InDebted.
“However, InDebted’s tech-centric approach dramatically lowers recovery cost, thereby increasing the overall industry size.”
The angel investor base that’s joined Reinventure for the capital raise include significant fintech expertise, including Invoice2go chief executive Greg Waldorf, Spotcap managing director Lachlan Heussler and H2’s Mike Zimmerman.
InDebted’s software, aimed at small to medium business customers, is already operational in the Australian market and boasts the recovery of “millions of dollars” for “thousands of businesses”. The startup claims the success rate of recovery is “well above the industry average”.
With getting paid posing a universal problem for small businesses anywhere on the globe, founder Josh Foreman said that the latest cash would be used to expand out from Australia into international markets.
“Many small businesses previously had nowhere to turn to help with unpaid bills,” he said.
“I started the business because the debt management space has not changed in decades, and incumbents do not properly serve SME customers because they are not using technology.”
Reinventure appointed Frederick as its third partner last month, joining founders Simon Cant and Danny Gilligan. The VC business, based in Stone & Chalk in downtown Sydney, runs two funds that total $100 million.