DebtStream secures £1.1m seed funding to modernize debt repayment

DebtStream, a digital platform for businesses to collect debt from those in arrears, has raised £1.1m in a funding round led by start-up venture capital firm Ascension.

US fund Fin Venture Capital also participated, along with angel investors Chris Adelsbach, founder of Outrun Ventures, and John McAndrew, former CEO of TransUnion.

The Chester, UK-based startup said it would use seed funding – shared exclusively with UKTN – to carry out hirings in engineering and the installation of customers.

Startup founders Gareth Bailey, Martin O’Donnell and Leo De Freitas believe the debt collection industry has not kept pace in the digital age.

The platform, available off-the-shelf or customized to match a company’s brand, allows those in arrears to manage their repayments privately and at their own pace.

The founders said their previous experience in the debt collection industry has shown that those who encounter financial difficulties are “often reluctant” to respond to traditional call center channels.

“In my personal experience, I have seen a family member with relatively low debt bombarded with letters, phone calls and house calls, causing them to stick their heads in the sand and ignore the situation. “said Martin O’Donnell, CPO and co-founder of DebtStream. “If there had been a safe digital space that they could use, at their own pace, without that pressure, they would have settled their backlogs and gotten back on their feet sooner.”

DebtStream said it works with customers to tailor the platform’s digital options to specific needs.

Some of the additional capital will be allocated to setting up a “plug and play” model where clients can be set up and running in “a matter of days”. It can also be integrated with other services through an API.

Ascension, which invests at the seed stage in UK companies, made the investment through its Fair By Design Fund.

“Due to the lack of innovation in the debt collection industry, borrowers are more disconnected than ever from debt collection agencies and lenders,” said Sam Marchant of Ascension. “DebtStream aims to improve the collection process by fostering honesty and trust between borrower and debt collector through personalized repayment plans.

“The Debtstream team is highly motivated and focused on improving the visibility of the collections process for the benefit of borrowers and collectors.”

Tana T. Thorsen