For most families, school fees comprise some of the largest expenses parents have to pay in a given year. On par with mortgages, loan payments, and rent, school payments exert a significant financial burden on parents, often requested in large amounts and at the most inopportune of times. Given that most parents get paid monthly salaries, this can pose a significant challenge and put the financial integrity of the family at risk.
zenda, a UAE-based fintech startup, is offering new solutions.
Founded in mid-2021 by two ex-McKinsey execs, zenda addresses the pain points around the payment of school fees—in particular, the lack of convenience and flexibility in payment options for parents and the poor collection of payments by schools.
Families can use zenda to track outstanding fees and make payments using pay-now and pay-later options, and unlock rewards for paying on time. zenda integrates with schools through its proprietary data model and APIs and eliminates last-mile reconciliation challenges and delays. It enables these financial solutions, like pay-later options, via its partnerships with BNPL (buy now, pay later) players, non-banking financial entities, banks and other institutions.
The Abu Dhabi SME Hub spoke with zenda co-founders Raman Thiagarajan and Haseeb Ahmed to learn more about the company’s intuitive solutions and their entrepreneurial journey so far.
Zenda co-founders Haseeb Ahmed (left) and Raman Thiagarajan (right)
Can you tell us about the professional backgrounds of zenda’s co-founding team, and how you came up with the idea to create the company?
We met during our tenure at McKinsey & Company. I have over 20+ years of experience and jokingly say that I am on my third career now; I led the firm’s Financial Services Practice in the MENA region and have been an entrepreneur for the past 6+ years.
Haseeb was a senior associate at the firm and actively worked in areas of analytics/decision science serving clients across the world and has been an entrepreneur over the past 5 years.
Our first venture was a socially-focused tech startup (www.nexquare.io) which aims to leverage data science in education and to build leading tech and data products for the sector. The social focus is on underserved markets and at price points affordable to them. Today our solutions are actively used across 10+ countries.
During COVID, a lot of our customers turned to us with challenges faced in collections and receivables. In the following months, we spoke with multiple institutions, banks, credit providers and other players, and realized that there was an issue. Whilst many payment gateways and banks existed, their offerings were generic and did not solve the core issues for the institution or the parent.
So in June 2021, we set up zenda.
Can you tell us a bit about how your business model works, and what core services you are offering to schools and parents today?
Today, we solve 2 important challenges faced by parents and institutions
Fee payments in schools (including nurseries, K12, colleges, coaching/training centres, tertiary education etc) are mostly non-digital, and even where digital, are cumbersome and expensive.
zenda makes it much simpler with an intuitive app that purpose built to context
The majority of families earn monthly but fee payments are bulky (usually termly), resulting in cash flow stress for parents and collection delays for schools. And with larger families, this is likely to be more challenging.
zenda allows parents to convert their bulky payments into monthly instalments, on-demand and with a few clicks.
Using zenda, families can track dues and make payments through a multitude of pay-now and pay-later options, and unlock rewards for paying on time.
We work with expert partners, such as BNPL players, non-banking financial entities, banks etc. who provide the credit.
Given the novelty of your business model in the region, and given the fact that you launched in 2021 amidst the pandemic, how would you describe the first few months post-launch? (your experience in building the platform and team, how you secured your first clients, experience navigating regulations and COVID, etc.)
COVID, as we have all experienced, has tested the core beliefs around how we work, how customers buy, etc. A B2B [venture] done fully remotely, that [would also be] selling to schools/educational institutions seemed like a big ask (considering our region). We also did not have an X or Y reference to copy from other markets.
However, the problem was real! Schools were having issues with collecting payments and parents couldn’t operate like before, so they intuitively understood the answer we were suggesting. Interestingly, it helped us focus sharper on building an end-to-end offering that solved the last-mile issues for both customers in a manner that existing generic solutions couldn't.
For example, our prior deep experience working with schools and system providers (from sophisticated ones to those still operating on Excel) gave us strong insights into building proprietary data models and APIs (much like Zapier) that allowed us to connect with all types of customers in a fully automated manner.
The response from our first schools in the UAE, once live with a fully working version, was terrific.
Zenda has crossed some notable milestones within less than 2 years since launch, having crossed $100m+ in annual contracted Total Payment Volume by Q4 2021 and raising a significant Seed round of $9 million earlier this year. If you were to reflect on your entrepreneurial journey so far, what are your greatest takeaways?
Thank you for the kind sentiments.
First of all, we are very grateful for the love that parents and schools have shown, and for their fabulous support in helping zenda scale. Within 18 months of launch, we are crossing the USD $400 million contracted TPV threshold and looking to close at a bigger number by end of year. This is, however, only the start, and there is a lot to be done before we would consider any anchoring around success.
Reflecting on our journey so far, a few thoughts that would come to mind are:
- Solving a real problem helps calibrate faster the relevance of your startup idea, and the ensuing product-market fit.
- In the 0-to-1 stage, nothing is ever easy and it feels continuously volatile as one navigates through day-to-day ambiguity and the curve balls that find a way to keep popping up. So the purpose for which one embarks on their entrepreneurial journey has to be deeply and personally meaningful.
- Finding and attracting like-minded colleagues is the single most critical aspect - It is much easier to tackle ambiguity with the right colleagues around. It makes it fun.
- Whilst capital is capital and any funding is important, having the right partners makes a very big difference.
Soon after launching Zenda, you made inroads into India, deploying your platform there to support parents and schools. How were you able to expand so quickly into a new market, especially given the different regulatory environments and market needs, and what are the next countries you are targeting?
Whilst UAE and India are very different markets (high ARPU/low volumes on the one side and low ARPU/high volumes on the other), the stories we hear from parents as well as their expectations, seem very similar. Agnostic of economic strata and culture, every parent obsesses about the future of their child/children.
On the schools' side, education (B2B) is a hyper-fragmented and cottage-like industry both on the institution side and supplier side, across most markets. With iterations and leveraging our deeper understanding of the sector, we were able to figure out GTM (go-to-market) models that worked well for both contexts
This helped us accelerate our expansion in India. We are already live with our first school in GCC (outside UAE) and are keenly exploring the next market in the GCC/MENA.
Have you received any support from any local or regional entities like incubators, accelerators, etc.?
No. So far we haven't reached out to any.
What are your plans for Zenda within the next 3 years?
zenda is a fintech app for families. Our mission is to help families thrive.
We aim to make it easier for families to manage money and enable their financial wellness. Finance runs deeply through the family, from paying for school fees to planning for short-term expenses such as family trips to saving for longer-term expenses, all decisions are usually done in a collaborative and collective fashion. However, the supporting financial services are stuck in a single-player paradigm. We are looking to change this.
We believe that financial experiences need to be built from the ground up and designed specifically for families around their natural approach towards making decisions
With approximately USD $70 billion processed annually in fee payments by private educational institutions in India, USD $37 billion in the GCC, and USD $34 billion in the rest of the Middle East and Africa, the market is sizable yet largely untapped
Our aspiration is to be a relevant player across 20 markets in the next 5 years, creating value for educational institutions and families across these.