Sydney startup InDebted has secured $14 million in Series A funding, following 300% revenue growth over the past 12 months.
The funding round was co-led by Sydney venture capital firm Carthona Capital and Singapore fund MassMutual Ventures, and also included repeat investment from Westpac’s innovation fund Reinventure.
Founded in 2015, InDebted is a technology platform designed to facilitate debt collection for businesses, while approaching the whole process in a more friendly way than is traditional.
In May 2017, the startup secured $1 million in seed funding from Reinventure.
Speaking to SmartCompany, co-founder and chief Josh Foreman says since that seed round, InDebted has grown to something like 18 times the size, in terms of valuation.
The team has also grown from a headcount of three people to more than 60, and in the past 12 months, the business has seen 300% revenue growth, Foreman says.
“It’s been a crazy journey so far,” he adds.
And it doesn’t look like it will be slowing down any time soon.
Over the past six to eight months, the startup has been bringing several ASX top-100 companies on board, the co-founder explains, so securing this latest batch of funding will allow it to scale to meet the needs of those large clients.
The funding will also allow the startup to expand overseas, initially into the UK market.
“There’s a real gap there in terms of an offering that we provide,” he adds.
“Supply and demand skew”
Growing a team 20-fold in just a few years brings significant challenges. For Foreman, finding the right talent has been something he’s been working on almost constantly.
“Australia is a pretty small market. There are tonnes of great startups across all sectors and everyone is hunting for amazing talent,” he says.
“Getting access to great talent is always the thing you have to work on.”
A shortage of supply means it’s not easy to find local developers or product designers, Foreman explains, meaning theInDebted leadership team has had to look overseas for new hires.
“I guess that’s what all startups are trying to tackle,” he says.
“The supply and demand skew is pretty far out of whack at the moment.”
The pipe dream
Still, within the next 12 months or so, Foreman expects to be up and running in the UK, and to have grown the team again, to more than 100 people.
For him, success isn’t necessarily measured in geographical scale or boots on the ground.
“To us, it comes down to the number of consumers we’re supporting,” he says.
Currently, InDebted has supported about 250,000 customers. Within a year, Foreman would like to see that scale to 1 million.
Looking further into the future, however, the founder hopes to take the business further than just debt collection, providing other resources to help empower people to financial fitness.
“We see ourselves as way more than debt collection in the future,” he says.
He sees InDebted providing access to tools and services to help people access additional financial products, and better manage their finances.
“We’ve got a great funnel into that, which is this awesome collections product that we’ve built,” Foreman says.
“But the pipe dream sits much broader than that.”
A learning curve
For any startup, $14 million is a significant chunk of funding. For a Series A raise, it’s especially significant. But this was not Foreman’s first rodeo, and he says this raise was a little less challenging than the first.
“As the business grows and you’ve refined your product-market fit a bit more, and the business is doing fundamentally well, that certainly helps,” he says.
The startup actually had funds reaching out to it with investment opportunities, and so it built a relationship with several of them.
“It’s definitely a learning curve,” Foreman says.
“The key thing — and certainly it holds true now — is making sure you have a really strong team around you.”
This is why it was significant for Foreman to have the continuing support of Reinventure, along with a local VC and an international player,
“Having great people on board on that side makes a big difference,” the founder says.
Rohen Sood, partner at Reinventure and a board member at InDebted, tells SmartCompany he has always believed in Foreman’s vision to turn an archaic industry on its head.
“Every industry is becoming more customer-centric and technology-driven. Consumers falling on hard times should expect no different,” he says.
“Given the changes and pressures in the industry, it feels like this is the right time for InDebted to continue to win market share and transform the industry.”