Dubai-based startup ClearGrid has secured $10 million in funding to revolutionize the debt collection industry in emerging markets, leveraging artificial intelligence (AI) to recover debts more efficiently and fairly. The company, founded in May 2023, has already made significant strides in the Middle East, helping banks, fintechs, and lenders recover more debt without resorting to customer harassment.

The debt collection industry in emerging markets has long been plagued by outdated practices, often damaging borrower trust and resulting in significant costs. ClearGrid's AI-driven approach aims to modernize this process, providing a more humane and effective solution for lenders and borrowers alike. The startup's co-founder and CEO, Mohammed Al Zaben, emphasized the importance of this mission, stating that ClearGrid is "a very ambitious company with a big mission in a very big market."

Al Zaben's journey into debt collection began after selling his previous startup, Munch:On, to Careem in 2022. During his time off, he reflected on the challenges of collecting payments from corporate customers, which led him to explore the world of receivables management and unpaid invoices. He soon realized that consumer collections posed an even bigger problem, with many agencies relying on outdated methods, including pen and paper, and basic customer relationship management (CRM) systems.

The surge in consumer lending, particularly in the Middle East, further highlighted the need for a more efficient and customer-centric debt collection process. Buy now, pay later (BNPL) unicorns like Tabby and Tamara were handling billions in sales, and unsecured lending totals were skyrocketing in the region. Al Zaben, along with his co-founders Khalid Bin Bader Al Saud and Mohammed Khalili, saw an opportunity to create a more modern and humane approach to debt collection, leveraging AI to streamline recovery and collaborate with existing vendors in the space.

ClearGrid's platform sits between lenders and borrowers, using AI to automate the collections process. Lenders integrate via ClearGrid's platform or API, sending borrower accounts for processing. The company's AI models score repayment likelihood, predict customer behavior, and personalize outreach across communication channels. According to Al Zaben, 95% of ClearGrid's operations are fully automated, including AI voice agents that handle hundreds of thousands of calls daily.

The platform categorizes borrowers based on their ability and willingness to pay, structuring repayments into smaller, manageable chunks, and nudging them toward repayment without coercion. ClearGrid claims its platform can cut collection costs by 50%. Since launching in 2024, the company has managed hundreds of millions in debt portfolios and signed ten major fintechs and banks in the UAE. An unnamed major bank increased recovery rates by 30% and cut collection costs in half, while a leading BNPL provider doubled recoveries by automating early-stage debt resolution.

Across the board, ClearGrid resolves debts twice as fast as traditional collection agencies, achieving between 38% to 50% resolution rates, while borrowers interact with the platform 60% more than they do with these agencies. The company makes money by charging a percentage fee on recovered amounts. With the funding raised, ClearGrid aims to "10x" revenue and accounts managed in 2024, and plans to double its engineering team in the next fiscal quarter to build what Al Zaben calls the "definitive credit orchestration infrastructure for the region."

ClearGrid's investors include Middle East and North Africa-focused VCs Beco Capital, Nuwa Capital, and Raed Ventures, as well as prominent angel investors such as Anu Hariharan (ex-YC, Avra founder), Amjad Masad (Replit CEO), Jason Gardner (Marqeta CEO), Justin Kan (Twitch co-founder), and Kenneth Lin (ex-CEO at Credit Karma). With its innovative approach and significant funding, ClearGrid is poised to transform the debt collection industry in emerging markets, providing a more efficient, humane, and customer-centric solution for lenders and borrowers alike.