Fintech/News/ Debt collection? There’s now a fintech for that As borrowing hits an all-time high and household finances dip, Ophelos says it’s reimagining the debt collection industry By Amy O'Brien 29 June 2022 Paul Chong and Amon Ghaiumy, Ophelos cofounders Paul Chong and Amon Ghaiumy, Ophelos cofounders \Fintech 'The time is now': Monzo searches for US CEO to double down on expansion By Amy O'Brien 9 February 2023 Fintech/News/ Debt collection? There’s now a fintech for that As borrowing hits an all-time high and household finances dip, Ophelos says it’s reimagining the debt collection industry By Amy O'Brien 29 June 2022 We all know what bailiffs are, but who’d have guessed there would one day be a fintech equivalent? Enter Ophelos, which just raised a £5m seed round to “revolutionise the debt collection industry in the UK”. It’s an uncomfortable and often controversial topic, but as inflation squeezes household finances, investors say debt collection is more relevant now than ever. What does Ophelos do? To be fair to Ophelos, there aren’t any actual bailiffs involved in its product. No one is going to come knocking on your door. Instead, it’s a fintech that was born from its cofounders’ observation that the debt collection industry was antiquated and inflexible. Ophelos is an entirely web-based platform that uses machine learning and data analytics, paired with humans for customer service, to point people towards plans for paying off the debt they owe to the various companies that choose Ophelos as a debt collector. So far, Ophelos says it’s being used by three of the largest energy retailers in the UK and fintech brands including Yonder, Plend and Butter. Its machine learning platform will use data points like the fact someone has visited a page with a repayment plan and then left it as a sign that this plan might be too expensive for them. “Our machine learning models determine who to contact on which day for which channel, which messages to send them and which offers to suggest to them,” CEO and cofounder Amon Ghaiumy tells Sifted. Ophelos, which is FCA regulated, operates on two business models. One is an annual subscription that is worked out by the volumes its client companies require, and the other is a transaction-based model, through which it operates like a payments processor for people’s debt repayments. Who’s investing in Ophelos? Albion VC, who led the round Form Ventures Vast Ventures Connect Ventures (existing investors) Fly Ventures (existing) Matt Robinson (cofounder, GoCardless and Nested) James Meekings (cofounder, Funding Circle) Jonah and Noah Goodhart (cofounders, Moat) What’s the debt collection market like? “Largely speaking, organisations have a one-size-fits-all approach. It’s very rules-based and static,” Ghaiumy tells Sifted. The status quo with incumbent organisations, according to Ghaiumy, is a set of steps that includes sending a letter to those in debt in the first instance, then progressing to calls from busy call centres. Taking debt collection and making it fintech has been done already in the US, by the likes of January and TrueAccord. But so far, the industry has stayed untouched in Europe. What’s next for Ophelos? Ophelos is planning to “aggressively hire” and double its 18-strong team by the end of this year, and then double its headcount again next year. For now, the UK is its focus market, but Ghaiumy says that the company is “very open” to international expansion. Sifted’s take It’s a topic that made us feel a bit ick at first glance, but if Ophelos is able to deliver on its promise to offer more support and understanding to those in precarious financial situations that can only be a good thing. Their challenge will be convincing companies that it’s worth bothering to do so, rather than calling upon the tried and tested bailiff. Amy O’Brien is a reporter at Sifted. She tweets from @Amy_EOBrien and writes our fintech newsletter — you can sign up here. Related Articles Instagram-hyped fintech Lanistar sees layoffs, late wages, and launch delays By Isabel Woodford Click here to read more Active investment management platform Sidekick raises £3.3m pre-seed By Amy O'Brien Click here to read more European football clubs jump into crypto with Socios ‘fan tokens’ By Ben Munster in Rome Click here to read more Nesta launches £2.8m Covid-19 response challenge to help people recover their jobs and finances Sponsored by Nesta Click here to read more Most Read 1 \Healthtech Is Daniel Ek’s new body scanner worth the hype? Sifted tried it out 2 \Venture Capital VC diversity needs to change — and white men need to take responsibility 3 \Venture Capital New €3.75bn European Investment Fund pot to back late-stage VCs 4 \Sustainability Counteract closes £15m fund for carbon removal solutions 5 \Mobility Was the $5bn that VCs plugged into escooters worth it?