BFREE closes growth round to acquire non-performing loans across Africa

BFREE, a Lagos-headquartered distressed credit investor, has closed an undisclosed growth equity round to scale its acquisition of non-performing loan portfolios across Africa.

The round was led by AfricInvest through its Financial Inclusion Vehicle (FIVE), with Algebra Ventures joining, marking its first investment in a Nigeria-headquartered company.

Existing backers Capria Ventures, VestedWorld, Axian CVC, Angaza Capital, 4Di Capital, and DotExe Ventures also participated. Capital will go toward larger portfolio acquisitions, deeper forward flow partnerships with banks and fintechs, and entry into new markets.

BFREE is the infrastructure that works when a borrower defaults on an unsecured loan, and the lender typically has nowhere to go. Legal recovery is economically unviable for small-ticket debt, so the loan gets written off and sits. In most African markets, the infrastructure to actually resolve those assets barely exists.

It started as a technology-led collections service provider and evolved into an institutional-grade portfolio buyer, closing more than 35 transactions and managing over 11 million borrower accounts.

“The market opportunity is significantly larger than the infrastructure historically available to address it,” said Julian Flosbach, CEO at BFREE. “This round puts us in a position to pursue substantially larger portfolio acquisitions, engage a broader range of institutional partners, and do so with the speed and certainty of execution that serious counterparties demand.”

AfricInvest’s bet is not on lending itself but on the resolution layer that makes the whole credit cycle sustainable. “High-velocity digital lending has become a core product across markets,” said Patrick Herrmann, Partner at AfricInvest.

Algebra Ventures, which raised a $100 million second fund in 2022 and has backed technology-driven financial services across Egypt and Africa, extends that conviction further. “Billions of dollars in African retail and SME credit go unresolved every year because the institutional infrastructure to clear them simply does not exist,” said Omar Khashaba, General Partner at Algebra Ventures. “Healthy credit markets need a disciplined buyer for distressed debt.”

The digital lending wave of the late 2010s and early 2020s pushed volumes of small-ticket credit across Nigeria, Kenya, Ghana, and beyond. It also produced volumes of default, much of it unresolved, sitting on lender balance sheets. BFREE’s business is, structurally, what that boom always required on the other end.

The funding environment reflects that shift. According to Condia’s recent State of Startup Funding in Africa report, African startups raised $2.2 billion in total disclosed funding in 2025; $618 million of that came through debt and hybrid instruments. By Q1 2026, debt had overtaken equity in capital volume for the first time, with $705 million raised across 59 deals in 14 countries. This is where BFREE comes in, making the credit market more functional for everyone.

BFREE plans to expand into other countries, but the details remain unspecified.

Last updated: May 6, 2026