Clerkie – a leading AI-powered financial automation platform – announced it raised $33 million in Series A funding led by Left Lane Capital with participation from other notable investors including Wellington Management Company, Flourish Ventures, Citi Ventures, CMFG Ventures and Vestigo Ventures. And fintech visionaries David Velez (founder of Nubank) and Tom Proulx (founder of Intuit) also joined the round.
Previously, Clerkie raised a $6 million seed funding round during the pandemic and it has now raised $41 million to date. This time, the company’s financial performance along with product differentiation led to an expedited and oversubscribed Series A financing.
The problem the company is solving is one that is deeply personal for Guy Assad, CEO and co-founder. Sourcing from his personal experiences as a person of color, Guy has seen firsthand – both in his family and in his community – the severe anxiety and financial hardship that can result from untenable debt burdens. And after his own father was diagnosed and ultimately lost his battle with cancer, the medical bills and the credit card debts racked up. Then it took him several months to haggle with the collections companies and the medical companies to find suitable repayment plans that would enable them to repay back these bills responsibly.
Guy had went straight to McKinsey out of Stanford Business School to work with large banks on advising their digital transformation efforts. And over the course of many engagements, Guy and his co-founders Sebastian Wigstrom and Gray Hoffman saw an opportunity to modernize legacy banking systems and processes with modern digital solutions that can automate and address a significant problem for financial institutions: delinquencies.
Now Clerkie’s proprietary platform has become the go-to tool for creditors looking to manage their loan losses while simultaneously helping millions of borrowers get out of debt and improve their credit. And the platform uses a number of data points to identify and help potentially delinquent borrowers avoid default. From there, the system surfaces viable workout options for a given borrower, thus helping them avoid the predatory collections process and ultimately helping them ease their debt burden and improve their financial health.
What the funding will be used for: The funding will be used to grow the engineering team and rapidly scale the company’s debt workout solutions to support more partners and help more borrowers.
KEY QUOTES:
“The consumer debt market is fundamentally broken for consumers and the creditors that serve them, as evidenced by the predatory collections practices and the crushing amount of debt burdening American families. Today, tens of millions of Americans are struggling with their debts and are falling into delinquency. It’s a lose-lose situation for the borrowers and for the banks who are racking up billions in losses. Our goal is to support struggling American families by giving them better tools to responsibly fulfill their debt obligations and ease their debt burden.”
Recounting the hardships following the loss of his father: ”It was just a lot. On one hand you’re dealing with this unthinkable grief and on the other hand you’re trying to manage this crippling financial stress. But, you just have to keep it moving and forge ahead because a lot of people are relying on you… That was an incredibly painful process; and I was blessed enough to be one of the lucky few that understood how the system works.”
— Guy Assad, CEO and co-founder of Clerkie
“These systems are incredibly arcane and rigid; we quickly saw an opportunity to help millions of at-risk borrowers pay back their debts responsibly and avoid delinquency if we could just modernize this infrastructure.”
— Sebastian Wigstrom, CTO and co-founder at Clerkie
“We could not be more excited to partner with Clerkie. As consumer debt delinquency rises, we believe technology that makes the lending system more efficient and effective for all parties will be critical. The Clerkie team’s deep subject matter expertise and commitment to making this process as constructive and beneficial as possible to the consumer stood out. We believe in that mission and look forward to being part of the journey.”
— Dan Ahrens, Managing Partner at Left Lane Capital
“We are honored to have partnered with Clerkie from the very beginning of their journey. With interest rates going up to a level not seen in approximately 20 years, significantly more Americans are at risk and the level of delinquent consumer debt is likely to exceed $130B. Clerkie’s debt automation platform is needed more now than ever and enables a true win-win outcome for lenders and borrowers alike.”
— Emmalyn Shaw, Managing Partner at Flourish Ventures, who understood the company’s vision very early on and co-led its Seed round
