Two McKinsey & Co grads founded a company to assist parents in tracking school fees dues and making payments through a variety of pay-now and pay-later alternatives. Zenda, the company, was founded during the Covid-19 epidemic in June 2021.
While working from nexquare, a socially focused edtech startup that leveraged data science in education to build tech and data products, Raman Thiagarajan and Haseeb Ahmed noticed that during the pandemic, many of their customers faced collection and receivables challenges—that is, recovering the debt owed. To solve this issue, the McKinsey and Company colleagues founded zenda, their second business, in June 2021.
The firm, which has its headquarters in Dubai, is registered in Kochi, India, and currently has offices in Bangaluru, Kochi, and Delhi. zenda intends to address two primary issues that parents and institutions encounter.
To begin with, tuition payments at schools (including nurseries, K-12, colleges, coaching/training centers, higher education, and so on) are largely done offline, and even in institutes that accept digital payments, the procedure is time-consuming and costly.
Second, while the majority of families receive monthly income, many schools collect fees at the beginning of the term or bi-annually, causing cash flow stress for parents and collection delays for schools. zenda enables families to keep track of their dues and make payments via a variety of pay-now and pay-later methods, as well as earn prizes for paying on time.
The primary product of the fintech firm is a parenting app. Parents may use the app to pay their fees in whole (through numerous digital payment methods ranging from cards to UPI and bank transfers) or in installments (pay-later). The institutes receive the money up front, and the software allows parents to pay it in easy installments.
Raman says of the platform, “zenda has partnered with several loan providers, and it provides parents an embedded finance experience once they’re on the app.” Access to a loan is a three-step process, and credit is released and the money is received by the school within five minutes (in most circumstances).
With a workforce of more than 40 people, two-thirds of whom are from India, the firm has grown quickly, with offices in Bengaluru, Kochi, Delhi, and Dubai.
Raman has over 20 years of experience and formerly worked as a partner at McKinsey & Company, where he oversaw the firm’s Financial Services Practice in the MENA (Middle East and North Africa) area. He has been an active player in the startup ecosystem for over ten years and an entrepreneur for over five years.
Haseeb was a senior associate at McKinsey & Company, where he actively engaged on analytics/decision science for clients all around the world.
Raman stated that their prior company is profitable and that its solutions are actively employed in over ten countries.
The market is vast but mostly unexplored, with around $70 billion handled yearly in fee payments to private educational institutions in India, $37 billion in the GCC (Gulf Cooperation Council), and $34 billion in the remainder of the Middle East and Africa.
In terms of competition, Raman says, “There are businesses providing services in certain areas like as payments, and there are numerous PGs and banks offering payment rails; however these are typically generic and not contextualised to the individual demands of parents/education institutions.”
There are lenders who provide 0 percent EMI solutions using typical loan methods. Banks and NBFCs find financing in this area to be appealing and reliable, and they often concentrate on infrastructure or institutional lending.”
“We are a financial service provider, and earn profits depending on transactions that take place through our app,” Raman explains of the startup’s business strategy. We earn money from payment and installation transactions. We collaborate with lenders, NBFCs, and BNPL providers to provide loans. They assess interest and price depending on variables such as loan history, volume, tenor, and so on.”
zenda’s users have expanded 20 times since its inception, according to Raman, with the app achieving over $100 million in yearly contractual payment volumes throughout the UAE and India by Q4 2021. Without specifying current statistics, Raman claims to have a solid pipeline of 1,000+ institutions that will go live in the next months.