Today we are thrilled to share some exciting news - Ophelos is officially launching! We’re also proud to announce a $2.3M funding round co-led by Connect Ventures and Fly Ventures to help us nurture financially healthy and trusted relationships between consumers and businesses.
Over the next few years, we will focus all our efforts towards improving financial health for individuals, families and businesses to help create a world where everyone is financially educated, empowered and equal -- starting this journey with reimagining the debt collection industry.
When Paul, Qingchen and I founded Ophelos it was quite a different world to the one we live in now. Covid-19 has impacted every aspect of life, notably leaving a huge dent in the global economy. That said, cracks were already showing pre-pandemic: living costs were rising, real wage growth was stagnant and global debt levels were exploding.
As a result, more individuals, families and small businesses face serious financial difficulties. According to the Legatum Institute, in the UK alone, 15 million people (23% of the population) live in poverty, 6 million adults have fallen behind on at least one household bill and collective personal debt has grown to a shocking £1.7 trillion as of February 2021. The pandemic has no doubt exacerbated these trends, but it is not responsible for many of the underlying issues.
Our vision is a world where everyone is financially educated, empowered and equal. To make this vision a reality, we need to address several issues, at their source. This includes improving financial literacy, providing easier access to affordable credit, helping customers repair their credit scores and giving businesses better tools to detect and manage vulnerable customers, amongst many other things. We believe that the best place to start this journey is by reimagining the debt collection industry - an industry that is still in the dark ages when it comes to technology and customer-centricity.
There are a lot of misconceptions surrounding the debt collection industry. It is commonly associated with the predatory and hostile ways that customers with debt may be treated. While there are certainly debt collectors out there that fit that description, this is not always the case (at least in the UK). The Financial Conduct Authority has put measures in place that have brought about a lot of positive change in debt collection practices and behaviours over the past 10 years. That being said, the industry is still very antiquated when it comes to using technology and most importantly applying customer-centric thinking to product development. We believe that there is a great opportunity to create a category-leading, customer-centric technology company in the debt space that drives better outcomes and improves financial health for consumers and businesses alike.
Tackling debt collection always felt like a natural place for us to start our journey because it allows us to understand, diagnose and address many of the underlying issues surrounding financial health for both consumers and businesses. It is also an area where neither side feels like the status quo is working for them.
Individuals and families feel out of control throughout the debt collection process because of a lack of digital tools for managing their debts, relatively old-fashioned communication methods used by traditional debt collectors and inflexible repayment options. All of these issues lead to a very poor customer experience which can severely impact the mental and physical wellbeing of many households with debt. It comes as no surprise, that 46% of people in problem debt also have a mental health problem, according to the Money and Mental Health Policy Institute.
Similarly, many businesses struggle with the debt recovery process from an operational perspective due to reputational and regulatory risk factors, ineffective engagement strategies, lack of data as well as little transparency and trust in their relationships with traditional debt collection agencies.
We believe the best way to challenge the industry is by building a unified debt collection platform that combines an AI-driven debt collection approach with highly trained customer operations specialists. This approach allows us to build products that truly put customers at the heart of the entire debt resolution process. It also enables us to understand how customers have fallen into financial difficulty, identify vulnerable customers, engage with them directly, be more conscious of how they are feeling and reacting, and learn from these interactions to improve our products and platform over time.
We are authorised and regulated by the Financial Conduct Authority for debt collection activities and plan on collaborating closely with the regulator to shape a new vision for the debt collection industry over the next decade.
We’ve built a great team that brings together software engineers, product designers, behavioural economists, machine learning & data scientists, and customer operations specialists who previously built software and AI products for world-class organisations such as Google, Monzo, ASAPP and IBM. We are applying our learnings from these technology companies and translating them into building customer-centric products and features within the debt collection industry. This includes (but is not limited to) seamless digital user journeys, flexible repayment plans influenced by behavioural science, open-banking enabled affordability assessments, vulnerability detection based on natural language understanding, AI-driven engagement strategies, automated dispute systems, real-time data visualisations and analytics, military-grade security and much more.
The outcome is a unified collections platform that makes the debt repayment process more humane, flexible and convenient for customers and provides businesses with better recoveries, more insights and reduced reputational & compliance risk at a lower cost, ultimately leading to improved financial health for consumers and businesses alike.
Many people believe that debt collection and positive social impact cannot be reconciled -- we wholeheartedly disagree with that notion. In fact, we believe that to be truly disruptive, we have to put social impact at the centre of our purpose, making sure that it seeps into everything that we do so we can focus on our larger vision as a company.
The next generation of innovative and disruptive businesses are socially responsible and we take a lot of our inspiration from successful, mission-led organisations like Bulb, Patagonia, and Allbirds. To underpin our social impact efforts, we are incredibly proud to announce that we are registered as a Pending B Corporation, as the first and only debt collection business in the world. As part of the B Corp movement, we have made a legal commitment to put people and our planet on the same level as profit and help create a more sustainable and inclusive economy. We will share more insights on our social impact mission and thesis over the next few weeks and months.
We are very humbled that we are joined on our journey by two investors in Connect Ventures and Fly Ventures, who deeply share our vision and values. In the past, they have backed some of the most innovative FinTech and AI startups in Europe, including TrueLayer, Curve, Soldo, Wayve and others. Today, we are already working with some of the most forward-thinking companies in the UK, and we are looking forward to adding more partners over the next 12 months.
As we begin the next step in our journey, I would like to thank our clients, the entire team at Ophelos, our investors, advisors, friends and families for their unwavering support - we couldn’t have gotten here without you.
This is just the beginning of an exciting new chapter, towards a world where everyone is financially educated, empowered and equal.
If you’re interested in learning more about Ophelos, please reach out. We’d love to hear from you!