Calgary’s Symend raises $ 52 million for AI software that uses emoticons and has a friendly approach to tracking late bill payers
Todd Korol / The Globe and the Post
A Calgary startup that combines artificial intelligence, behavioral science, and compassion to help large billers collect criminal customers has raised one of the largest venture capital projects in the city.
Symend Inc. raised $ 52 million from investors led by Inovia Capital and plans to more than double its 90 workforce by year-end after the platform expanded to most major telecommunications companies in North America, the said Managing Director Hanif Joshaghani.
The company’s customers already use the software to work with 10 million overdue account holders a year, and the company expects that amount to increase tenfold this year as more financial services and utility billers join – and with an increase in Customers are struggling who are struggling to keep up with payments due to the economic impact of COVID-19.
According to Symend, its customers, who pay millions each year to use the software, get back ten times their investment from using their platform, even though the company would not disclose customer names or provide them to confirm its claims.
Former 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 funding is the latest in a series of deals in the Calgary tech scene that has been a rare ray of hope for the city plagued by problems in the energy sector. Last year, robot maker Attabotics Inc. and online charity Benevity Inc. raised large venture funding, and Morgan Stanley bought software company Solium Capital for $ 1.1 billion. “This is a signal to the world that there is indeed a technical ecosystem here,” said Mary Moran, CEO of Calgary Economic Development.
Symend is the brainchild of Mr. Joshaghani, an investment banker who turned entrepreneur and was looking for his next opportunity in 2016 after selling part of his previous startup. He told an old friend that he was going on a passion project. When they remembered the financial problems their families had grown up with – Joshaghani’s family fled Iran at a young age and lived in refugee camps for more than 10 years before settling in Toronto – his friend suggested a solution to improve the situation, find somber experience dealing with debt collection agencies that both of them remembered.
Mr. Joshaghani was enthusiastic about the idea of improving the standard method of credit collection, where late customers are tracked down to a “one size fits all”, first with late notifications and then by being tracked by outside agencies.
He thought a better approach would be to treat the problem as a loyalty exercise rather than a risk management problem. The idea was to develop a software system that the billers provide and treat late payers individually, depending on the data available about their previous history and their probability of payment. The automated program would eventually employ softer tactics like friendly nudges, messages with smiley emoticons, constructive suggestions, and non-threatening follow-up actions based on the behavioral science suggestions of its algorithms.
“I thought, ‘If you engage with people in the right way, and they feel like you are here to help them solve their problems, and you get them to get back into engagement as soon as they get involved the nature of that conversation changes. Suddenly the likelihood of getting to a better place increases dramatically, ”he said. “It had to be about empowering people.”
His first call was to Tiffany Kaminsky, a marketing tech executive he’d befriended on the Calgary tech scene who had repeatedly tried to promote a range of businesses. She always said no, but “Symend was by far the best I had heard from him,” she said. She joined in 2016 as Co-Founder and Chief Strategy Officer.
The co-founders are very different, in background and style. Mr. Joshaghani is an “eccentric, noisy visionary who can get the room very upset and make everyone leave,” said Ms. Kaminsky, a Saskatchewan farmer’s daughter. “I am the calming force and more analytical.” But both “got through trouble, hectic, made names that weren’t based on our last name,” said Joshaghani. “Values can be informed by different origins, but values are values.”
“Both had a passion not to build a massive business but rather to solve this problem that they believe is causing significant trouble for families,” said Maor Amar, managing partner of Impression Ventures, an early supporter.
Mr Frind, who agreed to invest in 2017 and helped them tweak their algorithms based on techniques he had used to improve “conversion rates” for his dating site, said the two had built their team and their software and worked “flawlessly” during the takeover to market it.
Dennis Kavelman, managing partner of Inovia, meanwhile, said his company decided to invest after seeing Symend’s success in selling to hauliers who “are not easily satisfied customers. I think the mission and the problem they are trying to solve is one of the problems that I can’t believe are not yet solved, ”he said.
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