A Calgary startup that combines artificial intelligence, behavioural science and compassion to help large billers collect from delinquent customers has raised one of the city’s largest venture capital financings.
Symend Inc. raised US$52-million from investors led by Inovia Capital and plans to more than double its 90-person staff by year’s end after rolling out its platform to most of North America’s major telecommunications carriers, chief executive Hanif Joshaghani said.
The company’s clients already use the software to work with 10 million past-due account holders annually, and the company expects that amount to jump tenfold this year as it adds more billers in financial services and utilities – and deals with a surge in customers struggling to keep up with payments owing to the economic fallout of COVID-19.
Symend says its customers, who pay millions a year each to use the software, get back 10 times their investment from using its platform, although the company would not disclose any customer names nor make them available to confirm its claims.
Past Symend investors Ignition Partners, Impression Ventures, BDC Capital, Mistral Ventures and Markus Frind, the billionaire founder of online dating site Plentyoffish.com, also participated in the Inovia-led deal.
The financing is the latest in a string of deals in Calgary’s tech scene, which has been a rare bright spot for the city beset by woes in the energy sector. Last year, robot maker Attabotics Inc. and online charitable-giving platform Benevity Inc. raised large venture financings and Morgan Stanley bought software firm Solium Capital for $1.1-billion. “This is a signal to the world that there is actually a tech ecosystem here,” said Mary Moran, CEO of Calgary Economic Development.
Symend is the brainchild of Mr. Joshaghani, an investment banker-turned-entrepreneur who was looking for his next opportunity in 2016 after selling part of his previous startup. He told an old friend he wanted to pursue a passion project. As they reminisced about the financial problems their families had grown up around – Mr. Joshaghani’s family fled Iran when he was young and lived in refugee camps for more than 10 years before settling in Toronto – his friend suggested he build a solution to improve on the dismal experience of dealing with debt collectors that they both recalled.
Mr. Joshaghani loved the idea of improving on the standard method of credit collection, whereby tardy customers are pursued in a “one-size-fits-all” manner, first with late notices and then by being hounded by outside agencies.
He thought a better approach would be to treat the issue not as a risk-management issue, but as a customer-engagement exercise. The idea was to build a software system billers would deploy, treating tardy payers on an individualized basis, depending on what data showed about their history and likelihood to pay. The automated program would eventually deploy softer tactics such as friendly nudges, messages with smiley-face emoticons, constructive suggestions and non-threatening follow-ups, based on what behavioural science suggested its algorithms should do.
“I thought, ‘if you engage with people the right way and they feel like you’re here to help them get ahead of their problems and you get them to engage back, as soon as the nature of that conversation changes, all of a sudden the likelihood of getting to a better place improves dramatically,’ ” he said. “This had to be about empowering people.”
His first call was to Tiffany Kaminsky, a marketing technology executive he’d befriended through the Calgary technology scene and had repeatedly tried to recruit for a range of ventures. She’d always said no, but “Symend was by far the best one I had heard from him," she said. She joined as co-founder and chief strategy officer in 2016.
The co-founders are very different, in background and style. Mr. Joshaghani is an "eccentric, loud visionary who can very much excite the room and get everyone raring to go,” said Ms. Kaminsky, a farmer’s daughter from Saskatchewan. “I’m the calming force and more analytical.” But both “came through hardship, hustled, made a name for ourselves not based on what our last name was,” Mr. Joshaghani said. “Values can be informed by different origins, but values are values.”
“They both had a passion, not to build a massive business, but rather solve this problem they believe causes significant hardship on families,” said Maor Amar, managing partner with Impression Ventures, an early backer.
Mr. Frind, who agreed to invest in 2017 and helped them tweak their algorithms based on techniques he’d used to improve “conversion rates” for his dating site, said the pair have “executed flawlessly” in building their team and software and taking it to market.
Inovia managing partner Dennis Kavelman, meanwhile, said his firm decided to invest after seeing Symend’s success selling to carriers, who “are not easy customers to satisfy. I think the mission and problem they’re trying to solve is one of those I-can’t-believe-it’s not-solved yet problems,” he said.
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