A FinTech app that enables parents in the Middle East and North Africa to settle school fees with pay-now and pay-later options has raised $9.4 million in a seed round that was oversubscribed.
The app, called zenda, addresses “pain points” around the payment of school fees through its buy now, pay later business model, the company said on Monday.
It allows families to track when school fees are due and make payments through pay-now and pay-later options, while unlocking rewards for paying on time, the start-up said.
“In today’s digital world, we seek low friction and immediacy — why should that not be the case for fee payments?” said Raman Thiagarajan, chief executive and founder of zenda.
“Part of the ecosystem still runs on cash or cheque with no convenient option to pay later. Zenda schools are witnessing a systematic increase in their collections.”
The buy now, pay later (BNPL) business model, which allows consumers to make online purchases instantly and spread their payments over a series of interest-free instalments, has boomed since the onset of the Covid-19 pandemic.
The BNPL industry is expected to grow 10 to 15 times by 2025 worldwide, topping $1 trillion in annual gross merchandise volume by some estimates, a report by New York data research consultancy CB Insights said.
There are a number of BNPL players vying for a share of the Middle East market, including Spotii, Postpay, Cashew, Tabby and Tamara.
Regional and global investors including Riyadh-focused venture capital fund STV, Cotu, Global Founders Capital and UAE-based investment platform for early-stage tech businesses VentureSouq participated in zenda's funding round.
A report published by the Knowledge and Human Development Authority in November found that more than 40 per cent of pupils at private schools in Dubai pay less than Dh18,000 ($4,900) in annual fees.
Only 9 per cent of parents pay more than Dh75,000, while another 22 per cent pay between Dh18,000 and Dh35,000, data from the KHDA shows. In 2019, the average school fee in the city’s private schools was Dh29,057.
With about $37 billion processed annually in fee payments to private educational institutions in the GCC, $34b in the rest of Middle East and Africa, and $70b in India, the market is sizeable, yet largely untapped, zenda said.
“Fee payments in schools are mostly non-digital and even where digital, are cumbersome, manual and expensive,” it added.
“Also, the majority of families earn their salaries every month but school fee payments are usually termly or bi-annual, resulting in cash flow stress for parents and collection delays for schools.”
Zenda was founded in June 2021 by Mr Thiagarajan and Haseeb Ahmed. It is their second start-up and leverages insights from their previous education technology venture.
The FinTech integrates with schools through its proprietary data model and application programming interface, according to the statement.
“The UAE itself is a $8bn-plus market for private education fees and zenda is already well-poised to capture leadership,” Ihsan Jawad, general partner at STV, said.
The FinTech’s user base has grown twenty-fold since its launch and its annual contracted total payment volume crossed $100m by the fourth quarter of last year across the UAE and India, the company said.
Zenda's future plans include enabling families’ financial wellness through tailored banking and financial experiences, it added.
HAJJAN
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The specs
Engine: 3.9-litre twin-turbo V8
Transmission: seven-speed
Power: 620bhp
Torque: 760Nm
Price: Dh898,000
On sale: now
Libya's Gold
UN Panel of Experts found regime secretly sold a fifth of the country's gold reserves.
The panel’s 2017 report followed a trail to West Africa where large sums of cash and gold were hidden by Abdullah Al Senussi, Qaddafi’s former intelligence chief, in 2011.
Cases filled with cash that was said to amount to $560m in 100 dollar notes, that was kept by a group of Libyans in Ouagadougou, Burkina Faso.
A second stash was said to have been held in Accra, Ghana, inside boxes at the local offices of an international human rights organisation based in France.
How much do leading UAE’s UK curriculum schools charge for Year 6?
- Nord Anglia International School (Dubai) – Dh85,032
- Kings School Al Barsha (Dubai) – Dh71,905
- Brighton College Abu Dhabi - Dh68,560
- Jumeirah English Speaking School (Dubai) – Dh59,728
- Gems Wellington International School – Dubai Branch – Dh58,488
- The British School Al Khubairat (Abu Dhabi) - Dh54,170
- Dubai English Speaking School – Dh51,269
*Annual tuition fees covering the 2024/2025 academic year
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
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Storage: 64GB, up to 512GB microSD
Camera: 8MP rear, 5MP front
Connectivity: Wi-Fi, Bluetooth 5.0, USB-C, 3.5mm audio
Battery: 8200mAh, up to 10 hours video
Platform: Android 11
Audio: Stereo speakers, 2 mics
Durability: IP52
Biometrics: Face unlock
Price: Dh849
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
2019 ASIA CUP POTS
Pot 1
UAE, Iran, Australia, Japan, South Korea, Saudi Arabia
Pot 2
China, Syria, Uzbekistan, Iraq, Qatar, Thailand
Pot 3
Kyrgyzstan, Lebanon, Palestine, Oman, India, Vietnam
Pot 4
North Korea, Philippines, Bahrain, Jordan, Yemen, Turkmenistan
Who is Allegra Stratton?
- Previously worked at The Guardian, BBC’s Newsnight programme and ITV News
- Took up a public relations role for Chancellor Rishi Sunak in April 2020
- In October 2020 she was hired to lead No 10’s planned daily televised press briefings
- The idea was later scrapped and she was appointed spokeswoman for Cop26
- Ms Stratton, 41, is married to James Forsyth, the political editor of The Spectator
- She has strong connections to the Conservative establishment
- Mr Sunak served as best man at her 2011 wedding to Mr Forsyth
Sholto Byrnes on Myanmar politics
Wicked
Director: Jon M Chu
Stars: Cynthia Erivo, Ariana Grande, Jonathan Bailey
Uefa Nations League: How it Works
The Uefa Nations League, introduced last year, has reached its final stage, to be played over five days in northern Portugal. The format of its closing tournament is compact, spread over two semi-finals, with the first, Portugal versus Switzerland in Porto on Wednesday evening, and the second, England against the Netherlands, in Guimaraes, on Thursday.
The winners of each semi will then meet at Porto’s Dragao stadium on Sunday, with the losing semi-finalists contesting a third-place play-off in Guimaraes earlier that day.
Qualifying for the final stage was via League A of the inaugural Nations League, in which the top 12 European countries according to Uefa's co-efficient seeding system were divided into four groups, the teams playing each other twice between September and November. Portugal, who finished above Italy and Poland, successfully bid to host the finals.
UAE currency: the story behind the money in your pockets
'Champions'
Director: Manuel Calvo
Stars: Yassir Al Saggaf and Fatima Al Banawi
Rating: 2/5
