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Where We Stand Today

It’s been a while since we’ve given an update on what we are up to so I thought it made sense to write something again. Four months ago we officially launched and a lot has happened. Most importantly, we closed our pre-seed round.

We are excited to have a great group of strategic investors on board. We initially set out to raise a bit less but we reached slightly over €1m for the pre-seed round. We wanted to make room for the people who are strategic partners for us, including Seedcamp, MAS, Matthias Kröner and additional angels who prefer to remain anonymous. What’s key is that these investors quickly started delivering via their networks and enabled us to take advantage of these opportunities.

Just as importantly we’ve been hiring great people. The first developers are plugging away alongside Michael and we are targeting the early fall to have our product pilot-phase ready. Our hiring strategy had to factor in the longer severance periods in Germany which does slow down the on-boarding of new employees. But we are excited that new team members are coming each month.

Finally, we solidified our thinking around the opportunity that we want to address. We remain convinced that the opportunity is to build a pan-European, tech-first debt servicing platform. As we talk with customers, we are seeing the outdated operations in this segment. By adding the simplest technology to the equation, they can significantly reduce costs, increase recovery rates and maximise customer satisfaction.

The CEO’s whom we are speaking with remain under pressure to decrease costs while at the same time increasing EBIT. The only way forward is by injecting technology at every possible step along the way. To grow his or her business, the CEO has to increase scale — without technology, costs explode. Important to many of these CEO’s is keeping the technology under their control. At Receeve, we allow our customers to remain in the driver’s seat. The level of integration with current systems is customisable and the solution can easily adopt their brand look and feel, maintaining a sense of continuity for their customers. Historically customer satisfaction and churn have not been the focus around these business processes. But as pressures on increasing profit and containing costs grow, incumbents must find new areas of the business to optimise. Improving debt recovery along with customer experience can provide that opportunity.

The incumbents in this sector are hampered by highly manual processes and by the lack of flexible solutions tailored to their needs. They discuss their digitalisation processes but they are disincentivized to truly make them work. Change would mean incumbents would have to take a hit to their earnings to truly deliver on innovation and therefore they struggle to evolve. Management teams, incentivised by EBIT targets, are also in a catch-22. Do I spend money now to keep up, reducing or negating my next year’s bonus? Do I change the status quo, take risks, and invest in innovation to reap the rewards in the longer term? Being human, the majority choose the guaranteed short-term reward. Short-term orientation can only maximise collections fees and add interest on top. It does not improve customer experience outcomes. Today’s business models just realistically do not allow incumbents to focus on better experience and long-term improvements.

To make change more rewarding for a greater part of the business we are addressing the whole collections stack, starting with technology at the dunning phase and incorporating it all the way through to the court process. With Receeve, our customers recover more in each phase of the process, starting with improved early stage case resolution which leads to better customer experience and lower customer churn. By injecting technology into each level of the stack our customers can address a significant chunk of collections via automated processes at a stage where the customer relationship can be saved. Technology and intelligent automation takes something which costs you multiple Euros now and reduces the cost to a fraction of a cent. The next goal is for our customers to process enough data volume to apply machine learning and ultimately true AI (but we do see that still as a couple years onward).

Finally, we remain convinced that a pan-European approach makes sense. The current players are in multiple geographies but have only become pan-European via acquisitions. They have fragmented IT systems and decision making is not centralised. Further, these regions all have their own regulatory hurdles. By centralising technology you can have the most up-to-date software at play and you can bake the regulation into that software. This way you take advantage of the network effects, improve compliance and decrease risk, while significantly reducing the resources you need in each country. You can also quickly enter new regions and remain responsive to the market’s ebbs and flows.

We continue to be driven by the possibilities we see in this sector and are enjoying building our team to shape receeve to be the solution that clients turn to when they are ready to take advantage of the opportunities.

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