BFREE, a Lagos-based distressed credit investor, has raised an undisclosed growth equity round to expand its acquisition of non-performing loans (NPLs) across Africa, signaling growing investor confidence in the continent’s emerging distressed debt market. The funding round was led by AfricInvest through its Financial Inclusion Vehicle (FIVE), with participation from Algebra Ventures and several existing investors.
The company plans to use the capital to scale portfolio acquisitions, deepen partnerships with banks and fintechs, and expand into new African markets where digital lending has grown rapidly but debt recovery infrastructure remains underdeveloped. Existing backers, including Capria Ventures, VestedWorld, Axian CVC, Angaza Capital, 4Di Capital, and DotExe Ventures, also joined the round.
Founded in 2020 by Julian Flosbach, Chukwudi Enyi, and Moses Nmor, BFREE began as a technology-driven debt collection platform before evolving into a large-scale buyer of distressed retail and SME loan portfolios. The startup now operates across several African markets and has completed more than 35 transactions involving over 11 million borrower accounts.
BFREE’s business model addresses a longstanding challenge in African credit markets. Many banks and digital lenders struggle to recover small-ticket unsecured loans because legal enforcement is often expensive and inefficient. As a result, defaulted loans are frequently written off with little chance of recovery. BFREE positions itself as the institutional infrastructure that helps lenders clear distressed assets from their books while offering borrowers more structured repayment options.
“The market opportunity is significantly larger than the infrastructure historically available to address it,” said CEO Julian Flosbach. According to him, the new funding gives the company the ability to pursue larger acquisitions and work with a wider network of financial institutions.
The investment also reflects broader shifts in Africa’s fintech ecosystem. The rapid expansion of digital lending over the past decade has increased financial inclusion across countries like Nigeria, Kenya, and Ghana, but it has also led to a rise in unpaid consumer and SME loans. Investors now see distressed debt management as a critical layer of the continent’s financial infrastructure. AfricInvest partner Patrick Herrmann said BFREE’s technology-enabled approach fills an essential gap in the digital lending value chain, especially as lenders seek sustainable ways to manage defaults.
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