Jodo Raises $15 Mn For Its Zero Cost Lending Solutions For Students & Educational Institutes

Fintech startup Jodo has secured $15 Mn in its series A funding led by Tiger Global. Existing investors – Elevation Capital and Matrix Partners India also participated in the round.

Jodo will use funds to accelerate product development, sales and acquire talent for the startup.

According to Jodo’s founder Atulya Bhat, lump sum fees of an education institute forms nearly 15-20% of one’s household income. In case, there are two kids in the family then the fee gets doubled putting a lot of burden on the family. 

“In such a scenario, Indian parents think of breaking their savings or borrowing money. After closely observing these problems, we thought of setting up financial products to make education fee payments more affordable and convenient for parents as well as students,” Bhat said.

Founded in early 2020 by Bhat, Raghav Nagarajan and Koustav Dey, Bengaluru-based startup Jodo works as a fee management system for educational institutions. It partners with educational institutions thereby, enabling them to provide flexible fee payment plans to parents for enrolled students. 

According to the startup, it helps parents to make monthly or quarterly fee payments to educational institutions. Further, the fintech platform also aids educational institutes in getting predictable cash flows on pre-scheduled dates.

“So academic institutes don’t have to worry about following up with parents. They don’t have to worry about how much the fees will come next month. With Jodo, they get a sort of guaranteed predictable cash flow,” Bhat said.

Jodo said, presently, its platform is connected with more than 700 educational institutions including schools, colleges and universities and coaching centres, among others. 

Working Of Jodo’s Lending Solutions

Jodo’s lending solutions assist parents to pay academic fees in 8-12 monthly instalments at no cost. Let’s suppose a school charges an annual fee of INR 1 Lakh from students, in that case, parents can pay INR 10k per month for up to a period of 10 months using Jodo’s platform. 

Jodo earns revenue by levying a small fee to the educational institutes for every transaction that parents make through its platform or via its payment products. For example, its Jodo Flex, is a recurring payment product. 

“Jodo Flex helps parents to schedule their payments to the educational institution at the beginning of the academic year itself. So that’s an industry-first product and we are created a bunch of others like that,” Bhat shared. 

Unlike UPI payments where shopkeepers or retailers receive payments directly into their bank accounts and do not have to reconcile payments later, an educational institution needs to reconcile which student has paid fees and for which component. On the basis of this, the institute has to generate a receipt immediately, Bhat said while  explaining the fee collection process.

The Bengaluru-based startup claims to have processed worth INR 1000 Cr fees on its platform. It further asserts to have facilitated over 100,000 students and parents so far. 

Scope of Fintech In India’s Education Sector 

For Indian households, education has always been considered an important medium to elevate one’s standard of living and income. As a result, they stretch their finances to spend on education and even cut back on other expenses. 

“Currently, the education sector is like 2x or 3x of the e-commerce sector but there are not many financial products built specifically for that sector. The education sector is lagging behind in digitisation and efficiency,” Bhat stated.

If we talk about India’s fintech sector, a chunk of digital payment options are available for individuals today. On the other hand, a handful of fintech products have been built specifically for the education sector.

“Today, parents are looking at convenient payment options in the education space. Besides that,  educational institutes are also looking to provide convenience to parents in paying off academic fees of students,” Raghav Nagarajan, cofounder of Jodo, said. 

Further, Jodo claims to have grown 10x year-on-year (YoY) since its inception. It has a presence in 50 Indian cities as of now. It also aims to build a revenue management system for the institutes in the near future. Also, in the next 12 months, it aims to process about INR 15,000 Cr fees and partner with 5000 educational institutes. 

In the fintech lending segment, it competes with the likes of Zenda and Propelld, among others.

As per an Inc42 report, India’s fintech sector is likely to become a $1.3 Tn market, growing at a CAGR of 31% between 2021 and 2025. Of this, the lending segment accounts for a $616 Bn share in the entire fintech industry.