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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

Paul Chong and Amon Ghaiumy, Ophelos cofounders

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

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