With unemployment growing at a worrying rate, we’re seeing a lot more people finding themselves in hot water when it comes to their finances. Today a startup that’s built a platform to help identify and help those users when they find themselves unable to make payments is announcing a very large growth round of funding to meet new demands for its services.
Symend, a Calgary, Canada-based company that builds behavioural analytics into customer engagement products to identify customers having trouble with their bills, and then suggests alternatives to keep them from defaulting altogether, has picked up $52 million in funding, a growth round that it will be using to help it handle a massive boom in its business.
The company has been around since 2016 and has to date “treated” (its term for customers that it has touched and interacted with) some 10 million customers, on behalf of its enterprise clients. But its current funnel is such that CEO Hanif Joshaghani, who co-founded the company with Tiffany Kaminsky (the chief strategy officer), estimates that they will have treated 100 million customers by the end of this year.
Unsurprisingly given that growth, this latest round is a significant boost on the amount its raised previously, which was just $8 million, in a mix of Canadian and USD. It’s being led by Canadian VC Inovia Capital, with participation from Ignition Partners, Impression Ventures, BDC Capital’s Women in Technology Fund, Mistral Venture Partners, and angel investor Markus Frind (the Canadian founder and former CEO of dating site PlentyOfFish).
A lot of the focus in the world of online payments — perhaps understandably — has been on the payments themselves. How can they be secure, how can they be made more user-friendly for developers to implement, and what is the best practice to make it frictionless for customers to avoid abandoning transactions altogether?
But current times have highlighted another very important issue, which is that payments in many cases (especially with a recurring service) become your primary point of contact with customers, so having a bad experience at that point can ruin that whole relationship. These days, ‘bad experience’ can come in the form of a threatening message delivered when you are at your most vulnerable because of financial problems, or fines that just make the problem worse, and so on.
Symend’s solution is to apply behavioural analytics and AI to the situation, to help try to identify when and where problems might occur, and come up with alternatives, be they defrayed payments, payment holidays or something else. (The company’s staff is 25% PhDs, with a large part of those behavioural scientists, said Joshaghani.)
The idea here is to provide ways of a business recovering some money, in cases where you may never see anything as an alternative, while keeping the customer on board for a time when his or her finances may be in a better state.
“The economic impact of COVID-19 is leaving a lot of people in a bad financial situation,” he said. While some utilities may have their own initiatives or are supported by government efforts to offset people unable to pay bills, this doesn’t cover all businesses or scenarios.
The company does not disclose a lot about how it works, but Kaminsky said that the data that it uses to help assess customers comes from a variety of places, starting with the business itself and sometimes including third-party resources, not unlike the data trove that many AI-based fintechs might use to, say, weigh up the eligibility of a person for a particular loan at a particular interest rate.
“Tell us what you have and we’ll see what we can bring to bear,” she said of the approach. “We have a degree of flexibility depending on what a customer can provide.”
While the company does not tie the pricing of its service to how well a customer performs down the line, it’s always analysing this and sharing data with its users, and Kaminsky said that the ROI on average is 10X what customers invest in using Symend in the first place.
But that’s only some of the motivation here. Built partly on Joshaghani’s own life as a refugee immigrant who lived as a child and young adult with regular financial worries and little inherent financial literacy — something many immigrants can relate to, which I say from first-hand experience — Joshaghani said that providing alternatives and understanding to consumers in a digital world with little nuance otherwise was a huge mission for him. And that social angle was what convinced Kaminsky to join him in building the company.
“We’re impressed with Symend’s commitment to providing at-risk consumers with greater flexibility when it comes to meeting their financial obligations and protecting their credit. We invested in this great founding team because we value their openness, tenacity, and ability to deliver solutions for this critical problem,” said Inovia Capital Partner Dennis Kavelman in a statement.