Debt collection in emerging markets is often an outdated and costly process that can damage the relationship between borrowers and lenders. As consumer lending continues to grow and regulators push for fairer practices, many traditional collection agencies struggle to keep pace. ClearGrid, a Dubai-based startup, aims to modernize debt collection and recovery using artificial intelligence. They’ve just emerged from stealth mode with $10 million in funding to achieve this.
The startup, founded in May 2023, has secured $3.5 million in pre-seed funding and $6.5 million in seed funding. According to CEO Mohammad Al Zaben, this is a crucial advantage for a “very ambitious company with a big mission in a very big market.” Their goal is to assist banks, fintech companies, and other lenders in recovering debt more efficiently without resorting to customer harassment.
From Payment Collection to Debt Resolution
Al Zaben’s journey into the debt collection space began after selling his previous startup, Munch:On, to Careem in 2022. He realized that collecting payments from corporate customers was a major challenge. This led him to explore receivables management and unpaid invoices, and eventually consumer collections.
“When we spoke with collectors, it was clear the industry was stuck in the past — some agencies still used pen and paper, and the most advanced relied on basic CRMs,” Al Zaben told TechCrunch. “Debt collection was a people-driven business where collectors relied on scare tactics and harassment. Borrowers had a terrible experience, and Saudi and UAE regulators were beginning to prioritize consumer protection.”
At the same time, consumer lending was significantly increasing. Companies like Tabby and Tamara, offering buy-now-pay-later services, were handling billions in sales, and the total of unsecured lending in the Middle East was rapidly rising. Recognizing this trend, Al Zaben and his co-founders, Khalid Bin Bader Al Saud and Mohammad Al-Khalili, saw an opportunity. Despite lacking prior experience in the collections market, they launched ClearGrid to develop software and AI solutions to streamline debt recovery and work with existing vendors in the industry.
“At a time when lending is booming, regulations are tightening, and AI is reshaping industries, we see this as an opportunity to help lenders recover debt while building trust with borrowers,” the CEO said. “This is just the first step in building the infrastructure for the future of debt resolution,” Al Saud added.
Automating the Collection Process
ClearGrid’s platform sits between lenders and borrowers, automating the collections process using AI. Lenders can integrate by using the platform’s API, sending borrower accounts for processing. The company says its AI models assess the likelihood of repayment, predict customer behavior, and facilitate personalized outreach via various communication channels.
According to Al Zaben, 95% of ClearGrid’s operations are fully automated, including AI voice agents, which handle hundreds of thousands of calls daily. For those who prefer human interaction, the platform enables direct conversations and incorporates these insights into its models. The platform categorizes borrowers based on their ability and willingness to pay. ClearGrid then helps structure repayments into smaller, manageable installments to encourage repayment without applying pressure. The company claims that its platform can cut collection costs by as much as 50%.
“We’re building purpose-built tools and finding ways to make lenders better at what they do while also creating an opportunity for consumers to get out of debt,” said Al Zaben.
Since launching in 2024, ClearGrid has managed hundreds of millions in debt portfolios and has signed on 10 of the leading fintechs and banks in the United Arab Emirates. ClearGrid claims that one major bank saw a 30% increase in recovery rates and a 50% reduction in collection costs. Additionally, a leading BNPL provider doubled its recoveries through automating early-stage debt resolution. Overall, ClearGrid resolves debts faster than traditional collection agencies and shows between 38% and 50% improvement in resolution rates, while borrowers interact with the platform 60% more.
ClearGrid’s revenue model involves charging a percentage fee on recovered amounts. Currently, the startup’s revenue in the UAE, where it has already achieved profitability, is growing 30% month-on-month. The company plans to expand into Saudi Arabia this year. Al Zaben stated that with the funding raised, ClearGrid aims to increase its revenue and accounts managed tenfold in 2024, working with over 130,000 borrower accounts each month. Furthermore, the company is looking to double its engineering team in the next fiscal quarter to develop what Al Zaben calls the ‘definitive credit orchestration infrastructure for the region.’
ClearGrid’s investors consist of venture capital firms focused on the Middle East and North Africa, including Beco Capital, Nuwa Capital, and Raed Ventures, along with prominent angel investors such as Anu Hariharan (ex-YC, Avra founder), Amjad Masad (Replit CEO), Jason Gardner (founder and ex-CEO of Marqeta), and Justin Kan (Twitch co-founder).
