Ophelos raises £5m for AI-based debt resolution

Ophelos, a UK technology firm which says it uses AI to improve the debt resolution process, has raised £5 million in seed funding.

The round was led by UK venture capital firm Albion VC and included participation from Vast Ventures and Form Ventures, as well as existing investors and angel investors.

The company said its smart language analyst, ‘OLIVE’, helps to identify potentially vulnerable customers in debt through natural language understanding, which alongside its digital self-service capabilities allows customers to resolve debts on their terms.

The funding comes as the cost-of-living crisis seems to be pushing UK consumers further towards dangerous borrowing.

Credit card borrowing is rising at its fastest annual rate in 17 years, the Bank of England warned in May.

The annual growth rate for credit card borrowing hit 11.6 per cent in April, which is the highest figure since November 2005.

After being launched in 2021 by Amon Ghaiumy, Paul Chong and Professor Qingchen Wang, Ophelos said its client list includes “three of the largest energy retailers in the UK”.

In addition, Ophelos claims it is significantly outperforming traditional debt collection agencies on recovery rates, having seen performance improvements of up to 100 per cent.

Ophelos said it will use the capital to fund its global growth plans to expand its automation platform across the UK and to double the size of its team in the next year.

With the threat of consumer bad debt looming, ethical lending is increasingly becoming a point of interest for the wider fintech industry.

Revolut says its newly released BNPL product, “Pay Later” will have built-in safeguards to ensure users can afford their limit and offers a “more robust assessment” than its competitors because it approves the credit limit before the transaction rather than at the point of sale.

Amon Ghaiumy, CEO and co-founder of Ophelos, said that debt will ‘inevitably impact’ most UK households.

“With pressure growing on collections departments as a result of increased collections volumes and staff shortages following the pandemic, there is dire need for automation and better use of technology by businesses in this space, rather than on relying on antiquated debt collection agencies,” said Ghaiumy.

Cat McDonald, investment manager at Albion Capital said that the fintech “consumer revolution” has led to the provision of debt from businesses to consumers skyrocketing, but that businesses now have the power to choose where “the line between good or poor financial health gets drawn for their customers”.