Company Report
Last edited 3 years ago
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#Business Model/Strategy
stale
Added 3 years ago

Late last year Credit Clear acquired ARMA for $46M, funded by a $25.5M insto placement and $4M share plan at 40c.

ARMA offers a debt recovery solution, outsourced accounts receivables and litigation services. Last year ARMA reported $6.4M in EBITDA from $15.5M revenue.

It’s all about the synergies, isn’t it always, with Credit Clear intending to pursue its billing platform in ARMA’s approximately 400 customers.

ARMA co-founder Andrew Smith will take the role of CEO of the joint organisation with former CEO, who has only been in the seat around 6 months, is moving to a new role to focus on international markets. 

Shares are down around 20% in the last 6 months. Not held, but will be watching to see if the synergies eventuate. 

#Business Model/Strategy
stale
Last edited 3 years ago

Credit Clear has taken out the award for “Best use of AI” at the sixth annual 2021 Australian FinTECH Awards over contenders Moula and MyMoney.

In winning the Best use of AI award, Credit Clear demonstrated integrating AI into its accounts receivable technology had resulted in a 150% plus increase in collections. 

The company uses AI to "select the optimal content and channel of engagement which can lead to significantly better outcomes, while a wrong decision can result in increased costs or worse, permanently lost opportunities".

Using its next best action (NBA) model, the Credit Clear developed its AI technology to optimise recoveries while minimising collection costs.

Credit Clear says its NBA model treats every account in a “distinctly unique way” and has a recurrent neural network to assist with building and identifying patterns in a customer’s engagement history.

In other words, they have optimised when to hound people over outstanding debts.


#Management
stale
Last edited 3 years ago

Credit Clear has delivered solid results with a 70% revenue increase to $11 million. The increase has come organically from digital revenues, new client wins and high retention rates across their customer accounts across various industries including transport, financial services, insurance, government, and utilities.

This puts them on their way to meeting the aspiration of being leading technology company in receivable management, delivered using proprietary digital billing and communications platform. Both artificial intelligence (AI) and machine learning (ML) are used to increase engagement and improve debt management.

The process uses email and SMS to target customers. While this sounds like standard debt recovery tools, the use of technology has been proven to increase recovery. In the 4 years since launch the company has increased recovery rates by over 300% for customers including Bendigo Bank, Suncorp, ME Bank.

This is a highly competitive (and regulated) market that can be a tough way to make money, especially against large, established competitors - did someone say Collection House?

Incoming CEO David Hentschke has a growth hat, seeking to expand the use of technology as well as investigating opportunities outside Australia. This is a watch to see if he can execute as he does not come from this industry.

The company has also recently added Hugh Robertson, director of equity capital markets at Bell Potter to the board. Robertson currently sits on the board of Envirosuite and Maggie Beer, and brings decades of experience in financial services.