A Seattle-area startup wants to help enterprises send more effective reminders to customers to pay their bills.
Former T-Mobile execs Balaji Sridharan and Dave Thoms are the co-founders of KredosAI, a company that uses behavioral economics and AI to learn which words, channels and times are the most effective at nudging a customer to pay off their tabs.
The goal is to help companies recoup revenue lost to missed payments, which the company estimates totals more than $600 billion in the U.S.
At some large enterprises, roughly 15% of revenue is tied up in delinquent accounts, with one in three customers paying bills late, according to Head of Product Ravikumar Vayuvegula.
“The delinquency experience is so ubiquitous it is considered normal — a cost of doing business,” he said.
Sridharan is a former VP of IoT devices at T-Mobile and engagement manager at McKinsey and Company. Other leaders at the company include Thoms, founder of a credit risks and analytics startup called The Devenir Project who also worked as director of credit risk management at T-Mobile, and Prasad Putta, founder of an RFID software provider called OAT systems that was acquired by Checkpoint Systems in 2008.
Kredos launched in October 2020 and has raised about $1 million from Seattle-based venture firm SeaChange Fund, along with angel investors. The startup has fewer than 10 employees.
The company primarily targets banks, telecommunication and financial technology companies. It declined to provide revenue metrics but said one of its large enterprise customers contributes $500,000 in annual revenue.
Amid higher inflation some households have been falling behind on bill payment, including for essential services such as telecom connection.
“Buy now, pay later” companies, which split the initial cost of purchase into incremental payments, last year saw their delinquency rates more than double after pandemic-era stimulus waned and interest rates increased.
Kredos will compete with large customer-relationship management software companies that automate outreach to customers. There are also startups including Canada-based Symend, which lets enterprises send “hyper-personalized” payment recovery messages to customers.
Kredos differentiates through the founders’ domain expertise in credit risk and subscriptions business, particularly in understanding regulations and implementing products, Vayuvegula said.
