Aussie digital debt collector scores $10m to buy US rival

“The key thematic for us is we’re building global collections infrastructure and our goal is to be the global API [application programming interface] for consumer collections,” he said.

“Who we service is typically large scale fintechs expanding geographically and entering lots of new markets.”

The company claims that, unlike many debt collection agencies, it focuses on customer experience and helping people who are in debt, rather than treating debtors (a word the business has banned) as a pariah.

Rather than calling people in arrears, it assesses what channel to communicate with a debtor (such as WhatsApp or email), at what time and provides people with a one-click access self-service portal where they can resolve their outstanding payments without speaking to anyone.

More than 90 per cent of the debt collections that go through InDebted are collected automatically via its platform.

The company has processed more than $1 billion of debt since it was founded and is used by the majority of non-banking fintechs, as well as big banks and telecommunications companies in Australia and New Zealand.

Mr Foreman said it had been most cost effective for the company to take on venture debt to fund the acquisition, rather than give away more equity.

He said acquiring Delta gave it the necessary licensing in all relevant US states to operate.

“The final thing was the client list. Delta had clients that aligned well with those we’d been servicing in Australia and Canada,” he said.

“Going into a new market with growth with the fintechs and then when we get established we move into enterprise customers.”

It took the company a couple of years to win its first big bank customer in Australia, but Mr Heussler said he was confident InDebted could make a quicker transition into the enterprise market in the US.

”The other thing that’s interesting though is the pace at which those fintechs are growing. In some places now, they’re the dominant player,” he said.

“Companies like Afterpay and Zip have exploded and are massively used by consumers, whereas two years ago we thought we had to win a big bank to generate significant revenue. Now, our fintech clients are growing so fast we’re less reliant on working with the bigger banks.”

The company’s latest capital raise brought its total raised to more than $25 million.

MassMutual Ventures managing director Ryan Collins said the future business pipeline of the fintech was impressive.

“MMV likes to back entrepreneurs with global ambition and the ability to execute on that vision, and InDebted certainly ticks both boxes,” he said.

The company competes alongside big businesses such as Credit Corp, and ASX-listed players Collection House and Pioneer Credit.