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FREED, a consumer debt relief platform, has raised $2.8 million in a pre-Series A round led by Inflection Point Ventures, the company announced on Thursday.
The round saw participation from Multiply Ventures, Chandigarh Angels Network, Lead Angels, Hyderabad Angels, The Chennai Angels, and a clutch of high networth individuals.
The funds will be used to strengthen teams across verticals, build the tech stack to roll out new and differentiated debt relief products and services and brand promotion.
Launched in August 2020, the company focuses on outstanding unsecured personal loans and retail credit card repayments.
It has over 6,500 consumers with over ₹350 crore in retail debt, and has settled over a thousand accounts with creditors.
The platform also offers personalised budgeting, spend analytics, repayment simulations using artificial intelligence technology, debt payoff strategies, and credit education.
It is building a proprietary credit score algorithm.
Ritesh Srivastava, Founder and CEO, FREED, said, “FREED was founded with a vision to help debt-burdened consumers resolve their debt and regain their financial freedom. IPV has backed some very successful and admirable startups at a very early stage, and we are excited to partner with them in this journey.”
“With the growth in retail credit, mounting NPAs [non-performing assets] and low recovery rates on late-stage delinquencies, FREED is attempting to solve a $15-billion NPA problem. The current retail unsecured loan book has surpassed $160 billion and is growing at over 12 per cent CAGR. There is a huge opportunity for debt relief in this segment, starting from prevention to cure for debt-burdened consumers,” Srivastava added.
Vinay Bansal, Founder and CEO, Inflection Point Ventures, said, “Debt can be stressful and create barriers for future loan requirements. However, with FREED, consumers can clear their personal loans, medical emergency loans and other debt which one may find difficult to pay due to sudden changes in their routine like loss of job, paycuts among others. IPV aims to extend their support in helping FREED strengthen their services and marketing plan.”
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