Headquartered in Lagos, the company works with banks, fintechs and other lenders to acquire and manage non-performing retail and SME loans. 

The latest round drew support from several African private equity and venture capital firms, including AfricInvest through its Financial Inclusion Vehicle fund, as well as Algebra Ventures, which made its first investment in a Nigeria-headquartered business through the deal.

Existing investors, including Capria Ventures, VestedWorld, Axian CVC, Angaza Capital, 4Di Capital and DotExe Ventures, also returned for the round.

BFREE said the new investment will help it pursue larger acquisitions of bad debt portfolios while strengthening long-term agreements with financial institutions that regularly offload non-performing accounts.

Having raised $3 million in funding in 2024, the company started as a technology-driven debt collection business before shifting into direct acquisitions of distressed unsecured loans, ranging from nano credit to SME facilities. 

Since launch, BFREE has completed more than 35 transactions and now manages over 11 million borrower accounts across several African countries.

Chief Executive Officer Julian Flosbach said the company now plans to operate at a larger scale.

“The market opportunity is significantly larger than the infrastructure historically available to address it. This round puts us in a position to pursue substantially larger portfolio acquisitions, engage a broader range of institutional partners, and do so with the speed and certainty of execution that serious counterparties demand,” he said.

Rather than handling one-off recoveries, BFREE works through forward flow arrangements. Under those deals, lenders agree to sell newly non-performing loans to the company on a recurring basis.

BFREE said its collection model avoids intimidation and public shaming, practices that have long attracted objection in parts of Africa’s digital lending sector. Instead, it focuses on repayment structures that borrowers can realistically manage.

Patrick Herrmann, partner at AfricInvest, said the company is filling an important gap in Africa’s fast-growing digital credit market.

“BFREE’s approach to credit management, based on a unique set of proprietary data and a technology-enabled collection platform, closes an essential gap in the digital lending value chain. 

“High-velocity digital lending has become a core product across markets, with financial institutions, banks and fintechs alike requiring effective ways to manage small-ticket non-performing loans. 

“BFREE’s execution-driven team has brought the platform to an inflexion point, which will enable them to purchase larger portfolios and become a prime partner for banks and fintechs across African markets,” he said.

For Omar Khashaba, general partner at Algebra Ventures, the investment shows encouraging interest in Africa’s distressed debt market, where lenders still struggle to resolve billions of dollars in unpaid retail and SME loans every year.

“Billions of dollars in African retail and SME credit go unresolved every year because the institutional infrastructure to clear them simply does not exist. Healthy credit markets need a disciplined buyer for distressed debt. 

“The founders Julian, Moses and Chukwudi have built a platform that combines rigorous portfolio pricing, risk management, and deep data infrastructure to clear distressed retail and SME debt at scale. We are backing BFREE together with AfricInvest to scale them across Africa and beyond,” he said.

BFREE did not disclose the size of the investment round. However, the company said the capital will support expansion in both existing and new African markets where demand for distressed debt solutions continues to grow.

Founded by innovative entrepreneurs with deep roots in Africa’s financial industry, Bfree is set to enhance credit management, placing ethics and technology at the fore of its operations.

The genesis of Bfree traces back to the founders’ dissatisfaction with prevailing credit collection practices across Africa.

Witnessing the adverse effects of aggressive debt retrieval techniques employed by predatory digital lenders, the company resolved to challenge the status quo. 

Bfree is working to ensure dignity and respect in all borrower-lender interactions. The company has been successful in implementing strategies that ensure fair and just debt recovery processes, helping borrowers to be treated with compassion and understanding, while still working to recover debts that are owed. 

Its focus on ethical debt recovery has gained the trust and respect of many borrowers who have found themselves in debt and in need of assistance.

Led by CEO Julian Flosbach, alongside co-founders Chukwudi Enyi and Moses Nmor, Bfree embodies a vision of financial empowerment and integrity. The current fund raised included diverse investors such as Capria Ventures, Angaza Capital, GreenHouse Capital, and others. 

Bfree’s innovative approach to debt recovery centres around empowering borrowers while ensuring the sustainability of lending institutions. 

Through scalable debt recovery methods, including self-service platforms and conversational AI tools, Bfree prioritizes humane interactions and borrower autonomy. The company leverages technology and ethics, to bolster the credit management sector.

With its recent funding, Bfree will expand its footprint across key African markets, attracting major banks and financial institutions in Ghana, Kenya, and Nigeria. 

While initially targeting digital lenders, Bfree strategically shifts its focus towards banks, recognizing their significant contribution to revenue generation. 

Beyond debt recovery, Bfree envisions a secondary debt market that facilitates the purchase of non-performing loans from African banks.

The company is utilizing predictive algorithms and analytics solutions to help banks scale through secondary markets with precision and efficiency, mitigating risk and unlocking new avenues for growth.

The funding round led by TLcom Capital, also received major contributions from global VC firm, Capria Ventures, existing investors, Lateral Frontier Ventures, Enza Capital, and Ingressive Capital, as well as several strategic private investors.

This new capital will be used to further strengthen SeamlessHR’s position as Africa’s leading cloud HR and payroll platform. It will provide means to grow the team, fuelling expansion across the continent to Southern and East Africa, with South Africa and Kenya as operation hubs respectively. 

The company will also add new product functionalities around artificial intelligence and HR data analytics. Leveraging its rich HR and Payroll data, SeamlessHR will also be launching new embedded finance products that will improve the lives of working people in Africa.

The endorsements of TLcom and Capria Ventures and the follow-on investments by Lateral Frontier Ventures, Enza Capital, and Ingressive Capital is significant for SeamlessHR, as it reflects the huge market opportunity, and the company’s potential to remain the leading HR SaaS company in the continent.

“Thanks to our customers, we have become the leading cloud HR and Payroll SaaS in Africa in such a short time. But this is only the beginning. We are fanatical about customer success and this funding will enable us to invest in the continuous optimization of customer experience across all touchpoints, adding new features and functionalities to empower enterprises as they continue their incredible growth,” says Dr Emmanuel Okeleji, SeamlessHR’s co-founder and CEO.

Founded in 2018 by Emmanuel Okeleji and Deji Lana, SeamlessHR deploys world-class cloud technology solutions to manage and streamline HR data and workflow end to end. Their solution automates HR processes and is the only enterprise-grade HR/Payroll SaaS designed in Africa to meet African enterprises’ demanding requirements to manage the entire HR lifecycle from hire to retire. 

SeamlessHR’s product suite includes a Core HR Management system, Performance and Competency Management, HR Analytics, Leave Management, Payroll Management, and Recruitment Management.

The company caters to hundreds of companies, and its client base cuts across multiple sectors in Africa, including renowned brands like PwC, Flutterwave, Sterling Bank, TGI Group, Lagos Business School, AXA, and Chapel Hill Denham. SeamlessHR’s cloud platform equips these clients and their people with the cutting-edge tools required to remain ahead of the rapidly changing HR management curve.

Andreata Muforo, partner at TLcom Capital, says “Over the last few years, SeamlessHR has consistently demonstrated its ability to deliver a robust HR and payroll platform for Africa’s medium and large businesses. The strong execution shown by Emmanuel and his team is a vital ingredient required to build a successful business and as they expand their products to include embedded finance and launch their solutions to new markets, we’re proud to partner alongside them and strengthen their push to unlock more value within Africa’s B2B space. At TLcom, we believe SeamlessHR can be the preferred platform for businesses to digitize workplaces and support their personnel.”

As e-connectivity and bandwidth capacity increase on the continent, there is a large appetite for efficient cloud computing solutions, and businesses are increasingly able to leverage cloud technologies to drive business transformation. 

The continent’s growing cloud computing industry reflects this opportunity – cloud computing in the Middle East and Africa is expected to grow from its current estimated market size of $14.2billion in 2021 to $31.4billion in 2026. SeamlessHR’s mission is to help African businesses leverage the continent’s greatest asset – its abundant human capital – with their cloud HR & Payroll software.

Will Poole, managing partner at Capria, said “SeamlessHR is addressing the needs of African enterprises in ways that the global giants can’t compete with by building customer-centric SaaS designed from the ground-up to address complexity unique to the continent”. 

He added, “Now that they’ve proven they can address the needs of disparate countries across Africa, we are confident that they will be the solution provider of choice to support their customers that are expanding globally.”

The company understands its position as a catalyst for business growth on the continent and remains committed to helping companies optimize their human capital through relentless innovation.