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Exclusive: Debt collection startup January raises $12M

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Dec 4, 2023

Illustration: Sarah Grillo/Axios

Debt collection startup January has raised $12 million in Series B funding led by insider IA Ventures, the company tells Axios exclusively.

Why it matters: With credit card debt reaching all-time highs and delinquencies rising, banks and fintechs need better debt collection tech.

How it works: January's technology-enabled collections agency helps creditors improve recovery rates while preserving relationships with their end customers.

  • The firm has a digital-first approach to contacting borrowers and provides them with a self-serve approach to getting out of debt.
  • Founder and CEO Jake Cahan says that makes it more efficient than traditional collections agencies.
  • "Traditionally, a single agent can handle about 1,000 debts. At our company, a single agent can handle over 150,000 accounts," he says.

Between the lines: In collections, Cahan says, "There's a root issue around opacity, lack of transparency and really bad data."

  • January can achieve better outcomes and better compliance, he says, because its interface leverages both first-party and third-party data about borrowers.

Zoom out: Seventy million Americans face debt collection annually, and more than a quarter of borrowers deal with threatening tactics from collectors.

  • That number is increasing, as over the past two years delinquencies here have risen by 35% and savings rates have dropped by 54%.

Zoom in: Against that backdrop, January says it has quadrupled revenues and its client count since raising its Series A in March 2022. The company was founded in 2016.

  • Its customers include top-20 card issuers and banks, publicly traded fintechs, credit unions, and debt buyers.

Of note: Existing investors Brewer Lane Ventures, Third Prime and Reciprocal Ventures invested in the round and were joined by new investors Upper90 and Shrug Capital.

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