Zenda, a UAE startup, secured $9.4 million in seed funding today to improve school tuition payment and management. The business hopes to have an impact on the educational sector by changing the way parents and guardians pay school bills, as well as how educational institutions handle fee collecting.
Zenda also intends to make Africa its next growth frontier after implementing expansion in Egypt – its third market after India – in the next months, as part of a growth drive spurred by a $9.4 million seed capital raised.
According to the statement, investors who participated in the round include STV, COTU Ventures, Global Founders Capital, and VentureSouq.
Zenda (also known as nexopay) is a fintech created to enable families pay bills with an option of PNPL (Pay-Now, Pay-Later).
The Pay Now option offers families the opportunity to make school bill payments easier and accessible from the comfort of their homes. The Pay Later option offers families the opportunity to split the school bills into their monthly budgets.
The startup firm, created by Raman Thiagarajan and Haseeb Ahmed, both ex-McKinsey & Company employees, in June 2021, is the duo’s second endeavour.
Zenda, according to Thiagarajan, is based on their first social Edtech firm, nexopay, which provides a management and data analytics solution for schools, instructors, and regulators.
He claims that their first venture helped them gain a deep understanding of the education market, allowing them develop a fintech solution that addresses the issues that parents and schools face when it comes to fee payment and management.
Zenda’s investors are betting on a huge addressable market. The $100 million worth of annual equivalent fees that Zenda has supported so far looks impressive given the short history of the company. But in a marketplace worth more than $140 billion a year in its target markets, that is a modest sum; the potential, if Zenda can pick up the pace, is, therefore, huge, Forbes argues.
How it works
Zenda’s app allows parents pay fees directly to schools while allowing schools accept and handle payments online, which helps to streamline collections. Because all transactions on Zenda happen in real-time, parents no longer need to present bank deposit slips as proof of payment.
The company also offers an embedded financing option that allows parents receive a tuition cost credit with a customisable repayment schedule.
Our mission is to help families thrive. We aim to make it easier for families to manage their money, and to enable their financial wellness. We see a need for family-centric products that are simple and collaborative.Raman Thiagarajan, CEO and Co-Founder
Africa in question
School-related expenses have long been a source of worry in African countries with a significant percentage of low-income households.
Many young Africans do not get the level of education they require. In Sub-Saharan Africa, for example, one out of every five children aged 6 to 11 is out of school. The proportion rises to roughly a third between the ages of 12 and 14. School fees play a significant role in educational marginalisation.
However, completely eliminating school fees may not be the best response because schools may become overcrowded. Besides, there are additional costs for books, and uniforms, among other things.
With Zenda’s advancement into Africa, there will be changes in how parents deal with this recurring problem. Parents have the option of paying in instalments. Also, traditional payment methods might result in transactions being lost in transit, generating problems for both parents and educational institutions.
The $9.4 million new funding will help this. The company sees investment in sales and marketing as a clear priority, with the acquisition of new schools the key to underpinning revenue growth. But product development will also be important, with both founders seeing an opportunity to move into adjacent categories.
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