Ophelos, a startup reimagining the debt collection industry to improve financial health for consumers and businesses, today announces its $2.3 million pre-seed investment round. The round was co-led by Connect Ventures and Fly Ventures and will allow Ophelos to continue building its customer-centric debt management platform, whilst growing the engineering and customer operations teams.
Ophelos partners with businesses to challenge and transform the $24bn debt collection industry in order to help them improve their customer relationships. By using AI and behavioural science to optimise and digitise customer communications, offer more affordable debt repayment plans and achieve more accurate vulnerability detection, the company improves financial health for both consumers and businesses, with customers more likely to engage and businesses more likely to recoup overdue debts.
Building a customer-centric debt collection process powered by AI
Personal debt has been growing across the world – in the UK alone, nearly 9 million people are over-indebted which can create a debt spiral where households borrow more to service existing debt. This has been further compounded by the Covid-19 pandemic. Around 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.
Businesses often employ debt collection agencies on their behalf to recover outstanding debts. However, most collections agencies rely on inconvenient and impersonal phone calls and letters to engage with customers, resulting in a bad customer experience and negative publicity for organisations looking for repayment. Instead, Ophelos puts the customer at the heart of the debt collection process so they can resolve their debts on their own terms.
Customers communicate with the Ophelos team through digital channels, set up flexible and affordable repayment plans through a digital platform, or opt for other solutions such as breathing space. Businesses gain insights gathered through digital affordability assessments and vulnerability detection underpinned by Open Banking to help them better understand the financial health of their customers and benefit from machine learning-driven pattern analysis to detect regulatory and compliance risk, amongst other features.
The outcome is a debt collection process that is accessible, anonymous and convenient for customers. It provides businesses with enhanced recovery rates, intelligent insights and reduced risk at a lower cost. Initial results with launch clients point to a 24% increase in debt recovered and a 28% reduction in costs for businesses. In addition, customer engagement increased by 68%, showing the significant positive impact of taking a customer-centric approach.
Ophelos is authorised and regulated by the FCA for debt collection activities and counts a leading renewable energy supplier and a challenger broadband company amongst its launch clients. The startup is also registered as a Pending B Corp. Ophelos’s wider mission is to help create a world where everyone is financially educated, empowered and equal. By starting with debt collection today, the company aims to understand and diagnose many of the underlying issues surrounding financial health for both consumers and businesses and build more products that address these issues in the future.
Bringing together AI and customer experience
Ophelos was co-founded by Amon Ghaiumy (previously Director of EMEA at AI company ASAPP), Paul Chong (previously Head of IBM Watson EMEA) and Prof. Qingchen Wang, a leading AI researcher and professor at the University of Hong Kong.
Stuart McFadden joined the leadership team in late 2020 as head of customer operations. McFadden was formerly head of financial difficulties at Monzo where he pioneered products such as allowing vulnerable customers to block gambling transactions. This combination of AI expertise and customer experience speciality is driving Ophelos’s customer-centric product culture and social impact mission.
Amon Ghaiumy, Co-Founder & CEO at Ophelos: “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. 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.”
Rory Stirling, General Partner at Connect Ventures: “Credit is a fundamental and growing part of our consumer economy. Fintech has given us many great innovations, including improved access to credit, but debt management has so far remained largely untouched and unloved. We see a very large opportunity to build superior digital products for consumers to understand and manage their personal debts. And at the same time it provides a strong customer-centric approach that enterprises expect to offer in all other parts of their business. Ophelos is the company that is going to make a difference here. It has a brilliant team that is re-thinking debt collection for the 21st Century and I look forward to working with them on this journey.”
Matt Wichrowski, Partner at Fly Ventures: “The debt collection industry is in dire need of a shake-up but until now, we haven’t seen anyone come along with the passion and insight to make a difference until Ophelos. Despite commanding billions of dollars every year this sector has been slow to adopt technology or modern product thinking. We felt that this was a unique opportunity to create a new category of tech-first, transparent and empathetic recovery. The combination of the founding team’s incredible backgrounds and social impact mission will be integral to Ophelos’s success and we are delighted to be backing Amon, Paul and Qingchen as they transform debt management.”