DUBAI, UAE–The ways in which buy now, pay later (BNPL) solutions are now making even bigger inroads into the traditional consumer loan business can be seen in one new app that has just concluded a round of funding.
zenda is reporting it has secured a $9.4-million oversubscribed seed round for its app, which it said addresses pain points around the payment of school fees, specifically, the lack of convenience and flexibility in payment options for parents and the poor collection of payments for schools.
zenda was founded in June 2021 by Raman Thiagarajan and Haseeb Ahmed, alumni of McKinsey & Company, where Raman led the Firm’s Financial Services Practice in the Middle East/North Africa (MENA) region.
With approximately $37 billion processed annually in fee payments to private educational institutions in the Gulf, $34 billion in the rest of Middle East and Africa, and $70 billion annually in India, the market is “sizable yet largely untapped,” the company said.
‘Cash Flow Stress’
“Fee payments in schools (nurseries - K12 - tertiary) are mostly non-digital, and even where digital, are cumbersome, manual and expensive. Also, the majority of families earn monthly but fee payments are usually termly or bi-annual, resulting in cash flow stress for parents and collection delays for schools,” the company said. “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. zenda integrates with schools through its proprietary data model and APIs (much like zapier) and eliminates last mile reconciliation challenges and delays.”
Seeking ‘Low Friction’
Added CEO and founder of zenda, Raman Thiagarajan, “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 cheque with no convenient option to pay later. Since our launch, 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. zenda schools are witnessing a systematic increase in their collections.”
The company reported its user base has grown 20X since June 2021
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