Credit Clear disrupts receivables sector with digital debt management platform

Australian fintech Credit Clear (ASX: CCR) is disrupting the traditional debt recovery sector as a growing number of companies convert to its digital receivables solution.

In the last year, the company recorded a 147% increase in digital revenue and added 82 new clients to its books as it continued to invest in its market leading digital communication and payment management platform.

The platform harnesses artificial intelligence and machine learning to increase customer engagement and improve debt management. For instance, tailored emails and SMS campaigns are sent “at the right time with the right language” to engage customers to make immediate payments in full, create instalment arrangements or request call backs.

According to Credit Clear, its “secure, robust and highly scalable” platform enables businesses to mitigate challenges and foster positive, long-term relationships with their customers while enhancing collection outcomes.

Growing pipeline of clients

Since launching in 2017, Credit Clear has managed over 3.6 million invoices and recovered in excess of $180 million while increasing debt recovery rates by over 300% for its clients.

The company also listed on the ASX last October after raising $15 million through an initial public offer (IPO) to accelerate the development of its proprietary tech platform.

It services many blue-chip clients across a range of sectors including finance providers Bendigo Bank (ASX: BEN), ME Bank, Prospa (ASX: PGL) and SocietyOne, insurance company Suncorp (ASX: SUN), utility providers Kleenheat, Synergy and Horizon Power, and state-owned water corporations in Western Australia, South Australia and southeast Victoria.

It also looks after automotive clients including Toyota Finance Australia, BMW and tyre manufacturer Bridgestone, jobs platform Seek (ASX: SEK) and government bodies including Queensland Health and Public Transport Victoria.

Annual results

Credit Clear achieved strong results for the 2021 financial year including a record high total revenue of $11 million, up 70% on FY2020.

Counted in this is $3.5 million in digital revenue (up 147% on the previous year) and a 94% digital gross profit margin, which demonstrates an increasing uptake of digital technology.

“Our innovative digital solutions continue to demonstrate strong traction over traditional collection methods, evidenced through high conversion rates of more than 1,250%,” the company reported.

From an operational perspective, Credit Clear has 967 active clients on its books (3% more than last year) with a customer retention rate greater than 99% and 82 new clients. The company believes its retention rate reflects its “high engagement and exceptional feedback”.

At the end of June, it had $10.7 million in cash and cash equivalent, primarily due to the IPO cash injection in October 2020.

New CEO to drive growth strategy

Credit Clear started the 2022 financial year welcoming David Hentschke as the new chief executive officer to lead an ambitious strategy focused on growing revenue, expanding the technology platform and exploring inorganic and international opportunities.

Mr Hentschke has held various senior roles in high growth tech companies including leading strategy, international and corporate development for the recently listed $3 billion property settlements firm PEXA Group (ASX: PXA). He also formed part of the senior leadership team at private credit technology company Equigen, which was acquired by Data Advantage (now Equifax Australia).

“Credit Clear continues to drive change in payments and customer engagement with its scalable Software-as-a-Service offering and market leading technology. I look forward to working with the team to further develop our new generation technology, significantly enhance customer experience and deliver shareholder value,” Mr Hentschke said.

Looking ahead, he said Credit Clear planned to develop and roll out “new and exciting” platform functionality and aimed to leverage its core digital capability to grow market share in target verticals.