A Seattle-area startup wants to help businesses send more effective reminders to customers to pay their bills.
Former Vice President of T-Mobile Balaji Sridharan is the founder of Believe the AIa company that uses behavioral economics and artificial intelligence to determine which words, channels and times are most effective in getting a customer to pay their bills.
The goal is to help companies recoup lost revenue from missed payments, which the company says totals more than $600 billion in the United States.
At some large companies, around 15% of revenue is related to overdue accounts, with one in three customers paying bills late, according to the product manager. Ravikumar Vayuvegula.
“The experience of delinquency is so pervasive that it is seen as normal – a cost of doing business,” he said.
Sridharan is a former vice president of IoT devices at T-Mobile and chief engagement officer at McKinsey and Company. Other company executives include Dave Thomasfounder of a credit risk and analytics startup called The Devenir Project, who also worked as director of credit risk management at T-Mobile, and Prasad Puttafounder of an RFID software provider called OAT systems which was acquired by Checkpoint Systems In 2008.
Kredos launched in October 2020 and has raised approximately $1 million from Seattle-based venture capital firm SeaChange Fund, as well as angel investors. The startup has less than 10 employees.
The company primarily targets banks, telecommunications and fintech companies. He declined to provide revenue metrics, but said one of his large enterprise clients contributes $500,000 in annual revenue.
Amid rising inflation, some households have fallen behind in paying their bills, including for essential services such as telecom connection.
“Buy now, pay later” companies, which divide the initial purchase cost into incremental payments, saw their default rates last year more than double after the pandemic-era stimulus waned and interest rates rose.
Kredos will be competing with large CRM software companies that automate communication with customers. There are also startups, notably based in Canada Symendwhich allows businesses to send “hyper-personalized” payment recovery messages to customers.
Kredos is differentiated by the founders’ domain expertise in credit risk and subscriptions, particularly in understanding regulations and product implementation, Vayuvegula said.