InDebted, a digital debt collection firm backed by major investors, has acquired Reminda, a smaller family-owned fintech company. The deal signifies a shift away from cost-cutting measures for InDebted and opens up new opportunities for the start-up.
Since its establishment in 2017, InDebted has raised over $70 million from investors such as Westpac’s Reinventure, Carthona Capital, MassMutual Ventures, and Perennial. However, as the tech sector tightened its belt, the company combined its most recent $22.5 million cash injection with a redundancy round, resulting in a staff reduction of 40.
InDebted, led by founder and CEO Josh Foreman, anticipates becoming cash flow positive in March. The acquisition of Reminda, previously run by the Cains family for over three decades, will help InDebted expand its client base and reach new segments of the market. While the acquisition price was not disclosed, it is believed to be under $5 million.
InDebted has already made strides in the American market, with its acquisition of US-based rival Delta Outsource in 2021. The American market now accounts for 80% of the company’s total revenue. Investors view InDebted as a “counter-cyclical bet” due to the nature of its work in debt collection, which thrives during tougher economic times. Foreman expects the company’s revenue to exceed $35 million this financial year.
The InDebted platform is used by over 100 organizations globally, including buy now, pay later firms Klarna, AfterPay, and Zip, as well as utilities like Octopus Energy and retailer Cash Converters. The recent increase in interest rates and inflation has driven customer growth, particularly in the US, where companies are using technology to handle missed repayments and restructure payment plans.
Looking ahead, InDebted plans to pursue further acquisitions to enter new geographical markets or access untapped market segments. The company is considering a large growth equity raise in late 2024, depending on capital market conditions.
Sources: The Australian Financial Review