Gravy, which provides failed payment recovery services, has closed its Series A on $4.5m.
US-based Arlington Family Partners served as the lead investor.
The co-founders of Gravy, Casey Graham and Renee Weber, have history with Arlington Family Partners. The family office managed their earnings from the acquisition of their previous business The Rocket Company, which offers coaching and resources to churches. The business was exited to Ministry Brands.
The idea for Gravy stemmed from The Rocket Company. Graham and Weber spent around two years fixing the problem of failed payments in The Rocket Company and built a tech-enabled solution to fix it.
Its solution used humans to win back failed payments for subscriptions and lower customer churn. This enabled the company to get a five-times higher offer for the company in its exit, Graham claimed.
Initially, Graham believed this to be a common business practice but soon found out most businesses used an automated process that demands payments via impersonal communications. This only had a 15% to 20% success rate, he said. On the other hand, Gravy claims to earn back 80%. The FinTech claims to be on track to return $1bn in failed payments by 2023.
In a blog post, the company said, “Then came the realisation that these tech-only solutions don’t work as well because customers often dismiss automated emails from companies. One thing that they do respond to, however, is personal outreach, where they feel valued and appreciated.
“For many new and fast-growing businesses, it’s a Catch 22 situation, where, as much as they would like to focus on making this happen for their customers to increase their long-term value, they can’t afford to implement it as they’re investing more heavily in growth and scale.”
With the capital from the round, the FinTech hopes to grow its team of 83 to 150 by the end of the year. It also hopes to boost customer acquisition efforts and invest into its product.
Graham said, “When we’re onboarding [a client], we create an empathetic script of three different responses or opportunities for us to negotiate with the customer to win that customer back.
“Getting the customers back works because of the added human component. People naturally respond because they know when they’re talking to a real person and not an automated script, he says.
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