"We Got Funded!" MENA School Fees App Zenda Raises US$9.4 Million In Seed Funding Round Zenda, a UAE-based startup aiming to ease how parents in MENA pay school bills with pay-now and pay-later options, has raised US$9.4 million in an oversubscribed seed round.
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Zenda, a UAE-based startup aiming to ease how parents in MENA pay school bills with pay-now and pay-later options, has raised US$9.4 million in an oversubscribed seed round. The investors that participated in the seed round included STV, COTU Ventures, Global Founders Capital, and VentureSouq. With its newest capital infusion and following the success of its entry to India, the startup is now aiming to enter the Egypt market.
Founded in June 2021 by Raman Thiagarajan and Haseeb Ahmed (both former McKinsey & Company employees), Zenda is their second startup, and it utilizes insights from their first venture, Nexquare, a management and data analytics system for the education sector. With their experience in the education market, the duo have now built a fintech solution that solves challenges that parents and school institutes face around fee payment and management.
With the Zenda app's pay-now and pay-later options, parents can pay fees directly to schools, which will streamline collections and let schools accept and manage payments online. Parents won't need to show bank deposit slips as proof of payment, since transactions on the app happen in real-time. With the app, parents can make online payments instantly and spread their payments over a series of interest-free instalments, as well as unlock rewards for paying on time. The startup also integrates with schools through its proprietary data model and application program interfaces to reduce fee payment delays.
According to Zenda, approximately $37 billion is processed annually in fee payments to private educational institutions in the GCC, $34 billion in the rest of Middle East and Africa, and $70 billion annually in India, indicating a sizeable untapped market. The enterprise offers a distinct solution to prevalent issues- fee payments in schools are mostly non-digital, and even if digital, are cumbersome. Also, whilst families earn monthly, fee payments are usually termly or bi-annually, resulting in cash flow issue for parents and collection delays for schools.
Talking about Zenda's proposition, Raman Thiagarajan, CEO and founder of Zenda, said: "In today's digital world, we seek low friction and immediacy- why should that not be the case for fee payments? Part of the ecosystem still runs on cash or check, with no convenient option to pay later." Since its launch, Thiagarajan noted that the startup has received strong market traction, with its user base growing 20x since June 2021 and its annual contracted total payment volume crossed $100 million by the fourth quarter of last year across UAE and India.
"Feedback from the market and especially from our users has been terrific– we are grateful and pumped with the response from parents and seeing how they have embraced our service," Thiagarajan says. "Zenda schools are witnessing a systematic increase in their collections. We have a truly outstanding team, and I feel privileged that such a passionate group is with us on this journey."
The startup's offering and strong traction was also an attractive factor for investors, says Ihsan Jawad, General Partner at STV. "The UAE itself is a $8+ billion market for private education fees, and they are already well poised to capture leadership. They have built an outstanding team, and we look forward to working with them in helping Zenda achieve its mission."