May 26, 2022

Most people have a negative attitude towards debt collection.

A startup named Yang wants to change that with a new $10 million fundraiser.

Founder Jake Kahn says most debt collection agencies fall into the category of “predatory agencies that exploit vulnerable borrowers.”

An estimated 70 million Americans are in collection debt. According to Kahn, at least a quarter of these people are threatened in some form by debt collectors, whether through threats of arrest, wage freeze or general intimidation.

Jan, formerly DebtCy, was founded in January 2016 on the assumption that lenders and lenders in general are concerned that they are risking their reputation by using traditional collection agencies. They also risk being fined by law, Kahn notes.

“I saw that on one side of the table you have debt settlement companies that are very hostile to creditors, and on the other side you have collection agencies that are very hostile to consumers,” he told gaming-updates. “And that’s why I’m like, ‘How do I fix one of the most broken and outdated parts of consumer finance?’ And that inspired me to start a business in this area.”

Yang has built relationships with lenders to help them provide troubled borrowers with a “systematic” way to pay off their debt.

“Lenders are not deliberately trying to put their borrowers in a harassing position. Ultimately, they are trying to maximize the net present value of their loan that is delinquent or written off,” Kahn said. To maximize that value, he says, they can improve the way they are collected internally. Their other options are to outsource debt collection to outside agencies or sell their accounts to entities known as debt buyers, who then maintain accounts with agencies and attorneys.

January’s ultimate goal is to be “the only platform to meet all of these collection and search needs,” Kahn said.

“We started by solving a very, very difficult problem: how to bulk up in a really obedient or really kind, but still really effective way, and that allowed us to solve some of the biggest problems in the industry. decide,” she said. “We have to stop treating people like criminals and let the system work because the debt won’t go away.”

Simply put, January is meant to be A technical debt collection agency that collects debts on behalf of creditors in a dignified manner. He charges a contingency fee for every dollar he raises.

The model seems to be working. In 2021, the company tripled its ARR and doubled its workforce, which now stands at around 37 and is expected to reach 70 by the end of the year.

image credit: January

In addition to hiring, Yang plans to use his new capital to further expand the product line.

“Every institution needs a good collection system,” says Kahn. Among the clients of the companySome of the biggest credit union logos, loan buying and fintech verticals,” he said, including bExeter Credit Union, multi-billion dollar credit union.

Yang claims that his approach to reward matching and software is unique in that it “guarantees” compliance and performance. And in the name of transparency, lenders can see the statistics as well as “a complete record of every consumer interaction across every channel since the loan was not repaid,” it said. Jesse Bierut, general partner of IA Ventures.

Investor said his company backed Yang because he said it was “disbanded” The root cause of every debt repayment problem: Vishwas.

“Until January, indebted consumers were one of the most oppressed groups in consumer finance. The return process was severely disrupted,” he told gaming-updates. “January flipped the script by connecting with people through trusted channels and providing transparency for consumers and lenders alike…His communication with consumers is based on respect for the person behind the loan.”

Brewer Lane Ventures also participated in the latest funding, bringing the January total to $16 million.

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