Mounting debts, specially in a post COVID era, has become a rather household problem. While Indian middle class has traditionally been known to shy away from taking debts, newer forms of lucrative credits, such BNPL (Buy-Now-Pay-Later), No-cost EMIs etc. have made it easier to get priced possessions, at an equally easier to avail debt. FREED, an online platform that helps consumers eliminate such and other debts, is banking on this opportunity, and has now landed a $2.8Mn pre-Series A round.
Led by Inflection Point ventures, the round saw participation from Multiply Ventures, Chandigarh Angels Network, Lead Angels, Hyderabad Angels, The Chennai Angels, and a clutch of HNIs. The funds raised will be utilized to bolster the team across verticals, build the tech stack to roll out new and differentiated debt relief products/services to scale up customer acquisition and brand promotion initiatives.
Founded in 2020 by Ritesh Srivastava, FREED is an online debt relief platform with a vision to help consumers achieve their financial freedom by helping them eliminate their debt. The platform is now also building a proprietary credit scoring algorithm for near prime/Alt A borrowers by leveraging data on borrower’s behavior during the DSP program. FREED is disrupting & organizing the current retail debt settlement market by creating a borrower centric comprehensive platform that solves end-to-end pain points.
Talking about the need for such platform, Srivastava says, “FREED was founded with a vision to help debt burdened consumers resolve their debt and regain their financial freedom. The problem needed immediate action and FREED will occupy the space of Friend and Financial Resurrector, helping consumers regain normalcy and a sense of balance in their life.”
Srivastava has been a serial entrepreneur, having founded a similar venture in the US. That venture helped settle nearly $2Bn in debts.
FREED currently claims to have enrolled over 6,500 consumers with over INR 350 crore in retail debt (~USD 45Mn) and settled over a thousand accounts with creditors, offering debt reduction to consumers and resolution of bad debt for creditors.
Its hot selling proposition is the Debt Settlement Program. Targeted specifically at people with high levels of unsecured debt, it offers personalized budgeting, spend analytics, repayment simulations using AI/ML, debt pay off strategies & credit education to help people avoid debt trap.
With the growth in retail credit, mounting NPAs 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 12% + CAGR. There is a huge opportunity for debt relief in this segment starting from prevention to cure for debt burdened consumers.”