If you’ve ever been on the receiving end of a debt collection call, you may not have had the best experience, and you’re not alone either. Research reports that 52 percent of Americans say they have felt “tricked or deceived” by a debt collector. With national consumer debt totaling $15.58 trillion as of last year, a lot of outstanding payments are floating around with little incentive for consumers to work with collectors.
NYC-based January, formerly known as Debtsy, is working to combat the tension between these consumers and collection agencies through its tech-backed gathering services.
On Wednesday, the startup announced it pulled in $10 million in funding from Brewer Lane Ventures with participation from IA Ventures and Third Prime Capital, bringing its total funding raised to date to $16 million.
Raising this round is “a testament to the material value that we’ve brought to tens of thousands of borrowers in helping them regain their financial stability,” January CEO and founder Jake Cahan told Built In via email. “I’m grateful to our team, early clients, investors and other believers who have been amazingly supportive as we’ve built this important business.”
The startup plans to use the new funding to expand its product line and hire an additional 33 employees by the end of the year, according to TechCrunch. In the meantime, January is actively hiring for 12 roles spanning its engineering, operations and sales teams.
“We started off by solving the really, really hard problem of how do you collect at scale in a really compliant manner or really compassionate but still really effective manner, and that enabled us to solve some of the larger problems in the industry,” Cahan told TechCrunch. “We have to stop treating individuals like criminals and start making the system work, because debt isn’t going away.”
According to January, its technology allows it to be 120x more efficient than traditional debt collection agencies with a 92 percent completion rate on payment plans.
Collectors or consumers who are in debt can use January’s platform to set up payment plans and send money directly to financial institutions. On the collection side of things, lenders can see, “a complete record of every single consumer interaction, across every channel, starting from the moment that a debt went unpaid,” Jesse Beyroutey, general partner at IA Ventures, told TechCrunch.
