A company that has built an artificial intelligence solution to make debt management more efficient and less stressful has secured £500,000 in angel investment as it seeks to expand into the wider financial services sector.

Inicio.AI allows consumers to work out their detailed affordability position online so companies or organisations to which they owe money can help them work out repayment arrangements. This process is usually done via lengthy telephone calls with another person at the end of the line, which can be hugely unpleasant for both sides.

Chief executive and co-founder Rachel Curtis said while people want to speak to human beings for certain tasks, the shame of struggling on repayments creates a "massive barrier" in the debt management market.

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“I think the latest figures are that one in eight of those who are behind on a household bill are now attempting suicide because they just can’t face speaking to an agent at a company they owe money to [and] go through detailed expenditure to work out what they can afford to pay," she said. "We became aware of that challenge and thought that was a really good case for when giving somebody a virtual agent is better than giving them a human being."

Formed in April 2020 and launched later that year, Inicio.AI recently graduated from the University of Edinburgh AI Accelerator where it was named winner of the 2023 programme. Currently employing six people, it is chaired by former Virgin Money chief information officer James McGlynn and recently welcomed James Holroyd, ex-chief operating officer of Edinburgh-based Modulr, as an advisor.

This is the second round of funding secured by Inicio.AI, both at £500,000, and the company is looking to raise a further £500,000 in the coming months. It was advised in this latest investment round by Scottish commercial law firm Davidson Chalmers Stewart, with the money earmarked for the recruitment of additional staff and securing new clients.

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In Scotland, Inicio.AI currently works with Glasgow-based Pastdue Credit Solutions and Life Link, a mental health and wellbeing charity.

“We’ve started in the debt space but ultimately what we have is a detailed affordability assessment," Ms Curtis said. "What’s become really obvious is there’s loads of applications for what we are doing, so we have already spoken to wealth management companies because they need to get affordability assessments.

"You’ve also got new lending cases, and you’ve even got property tenant onboarding because again you need to do an affordability assessment, so it’s kind of grown arms and legs around the other use cases.”