FREED, a consumer debt relief platform, raised $2.8 million in a pre-Series A funding round led by Inflection Point Ventures, the company announced Thursday.
The round saw the participation of Multiply Ventures, Chandigarh Angels Network, Lead Angels, Hyderabad Angels, The Chennai Angels and a group of high net worth individuals.
The funds will be used to strengthen teams across all verticals, build the technology stack to roll out new and differentiated debt relief products and services, and promote the brand.
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 personalized budgeting, expense analytics, repayment simulations using artificial intelligence technology, debt repayment strategies, and credit education.
It builds a proprietary credit score algorithm.
Ritesh Srivastava, Founder and CEO of FREED, said, “FREED was founded with the goal of helping over-indebted consumers resolve their debts and regain financial freedom. IPV has backed some very successful and admirable startups from a very early stage, and we are thrilled to partner with them on this journey.
“With the growth in personal credit, the increase in NPAs [non-performing assets] and low recovery rates on late defaults, FREED is trying to solve a $15 billion NPA problem. The current retail unsecured loan portfolio has exceeded $160 billion and is growing at a CAGR of over 12%. There is a huge opportunity for debt relief in this segment, from prevention to healing over-indebted consumers,” Srivastava added.
Vinay Bansal, Founder and CEO of Inflection Point Ventures, said, “Debt can be stressful and create obstacles for future loan needs. However, with FREED, consumers can pay off personal loans, emergency medical loans and other debts that may be difficult to pay due to sudden changes in their routine, such as job loss, salary cuts, among others. IPV aims to expand its support by helping FREED strengthen its services and marketing plan.
May 05, 2022