KredosAi raises USD $7 million in Series A led by BMW

KredosAi has raised USD $7 million in an oversubscribed Series A round led by BMW i Ventures.

The Seattle-based company is raising funds as large enterprises face rising consumer delinquencies and mounting pressure on overdue accounts. At any given time, millions of customer accounts are past due, tying up 10% to 15% of revenue in delinquent balances. At some large businesses, annual bad debt expense can exceed USD $1 billion.

New investors included Motley Fool Ventures and Walter Ventures. Existing backers Okapi Venture Capital, StartFast Ventures, SaaS Ventures and Stout Street Capital also participated.

KredosAi sells collections and customer engagement software. Its system sits between the point at which a payment becomes due and the point at which an account is written off, using behavioural data and artificial intelligence to tailor how and when companies contact customers with overdue balances.

Many large organisations still rely on standardised collections messages sent across broad customer groups, a practice KredosAi argues can damage customer relationships without materially improving repayment rates. Its platform adapts messages, channels and timing for individual customers.

Client results

According to the company, the platform has delivered measurable gains across its enterprise customer base, including an 11.5% reduction in write-off rates and a 13.6% increase in customer lifetime value. For some large clients, annual bottom-line benefits have exceeded USD $50 million.

KredosAi attributes those gains largely to preventing accounts from reaching the write-off stage, when external collections processes can erode value. Over the past two years, the platform has processed more than 200 million customer interactions.

That activity has been accompanied by rapid top-line growth, with revenue increasing more than sixfold over the same period.

"We built KredosAi because we lived this problem from inside some of the largest enterprises in the world," said Balaji Sridharan, Chief Executive Officer and Co-founder of KredosAi.

"Even companies that invest heavily in customer loyalty abandon that standard the moment a payment is late. The legacy approach - the same message, through the same channel, sent to millions of people - does little to solve the problem and a lot to damage the relationship," Sridharan said.

Sridharan founded the company in 2021 with Co-founder Dave Thoms after seeing the issue first-hand inside large organisations. KredosAi now works with several enterprise customers, including Anderson Brothers Bank, and is also a FICO partner.

Its software is integrated into the FICO Platform, where it provides AI-driven customer engagement tools. KredosAi serves enterprise customers across financial services, telecoms and auto lending in North America.

Investor view

BMW i Ventures said the investment was driven by both the founding team and the product's structure. The venture firm, the independent investment arm of BMW Group, manages USD $1.1 billion and backs companies in North America and Europe.

"We were drawn to KredosAi because of the strength of the team, the company's differentiated approach to combining behavioral economics with AI, and the clear data network effects behind the product," said Baris Guzel, Partner at BMW i Ventures.

"In an environment where enterprises are under more pressure to improve retention, we saw a compelling opportunity for a solution that can create meaningful value at scale," Guzel said.

KredosAi will use the new capital in three areas: expanding its go-to-market effort in financial services and auto lending; building new product features, including a multi-agent framework with voice agent support; and increasing headcount by two to two-and-a-half times over the next 12 months.

Founded in 2021, the company is based in the Greater Seattle area. It also offers multilingual support and holds SOC 2 Type II certification.