Nigerian Startup BFREE Secures Funding to Scale Distressed Credit Business

Nigerian fintech startup BFREE has secured a new growth round to scale its ability to buy non-performing loan portfolios, strengthen partnerships with lenders, and expand into more African markets.

Founded in 2020 by Julian Flosbach, Chukwudi Enyi, and Moses Nmor, the startup operates in a space most fintechs avoid distressed credit. BFREE focuses on acquiring and managing unpaid retail and SME loans, using AI to improve how collections are handled across emerging markets.

The amount raised in this round has not been disclosed, but it follows earlier funding, including a $2.95 million raise in early 2024. AfricInvest led the round through its Financial Inclusion Vehicle (FIVE), with Algebra Ventures joining for its first investment in a Nigeria-headquartered company. Existing investors Capria Ventures, VestedWorld, Axian CVC, Angaza Capital, 4Di Capital, and DotExe Ventures also participated.

Data, partnerships and operations

BFREE has built its model around data. Through more than 35 transactions and a portfolio covering over 11 million borrower accounts, the startup has accumulated a large dataset of distressed unsecured borrowers. That data guides how it prices risk and selects which portfolios to acquire.

The startup is becoming a long-term partner to lenders, not just a buyer of bad debt. It structures forward flow agreements, committing to buy newly defaulted loans on an ongoing basis. This gives financial institutions a more predictable way to deal with bad debt instead of offloading it in batches.

BFREE is also changing how collections are handled. It focuses on structured repayment plans and direct engagement with borrowers instead of aggressive recovery tactics, working on the idea that realistic terms lead to better recovery over time.