Nicolás Giménez, the co-founder of Argentina-based startup Fidu, has convinced over 1,000 schools across the Latin America region to place their operations in the hands of a scrappy edtech startup.
Fidu wants to build a new operating system for LatAm schools, so that institutions can digitally manage everything from finances to school-wide announcements. The company, co-founded by Giménez, Caterina Carreño and Ariel Manduca, announced today that it has raised $5 million from Lightspeed Venture Partners, NFX, Imaginable Futures and Broom Ventures. It also landed money from regional founders including Rappi’s Felipe Villamarin and Andres Bilbao, Auth0’s Matias Woloski, Despegar’s Roby Souviron and Frubana’s Fabian Gomez.
Here’s how the startup’s debut products work: school administrators can use Fidu’s app to send tuition and pay slips to parents, and then tuition is paid by the recipients via phone. The startup also is building technology that lets it better “know the customers of the school,” so that it’s easier to understand how stable the school’s revenue is. Once it has a better understanding of that data, it seeks to offer guaranteed revenue financing to schools. Fidu’s revenue-financing products are currently being piloted in Mexico City and Bogota.
Latin American schools are working with paper, WhatsApp groups and e-mail, Giménez said. “The huge challenge here was how do we create this operating system that is super simple to use for schools to just get online and start solving main administrative tasks. It’s a very Latin American solution, and it’s very different from how things work in the state,” the co-founder added. Fidu also built a custom app for schools to communicate with families, cementing its approach to being a full stack option.
Giménez explained that most schools only accept cash, which they keep in the school and the later deposit. He described it as “financially inefficient” and “not very safe for schools and families who need to move the cash around…high income schools might accept additional payment options like wire transfer, but it’s still very limited.”
The co-founder said that the startups coming before Fidu made schools “afraid of getting into new technology.”
“Most schools use inefficient (and mostly offline) administrative processes, which leads to school administrators spending +70% of their time in bureaucratic tasks instead of teaching,” he said. “Of those schools who use software, which are a minority, they use legacy systems which are very complex to use and end up taking more time than they save. That’s why school owners are many times afraid of getting new technology, as they had bad experiences in the past.”
“It made that initial bad experience at many schools,” he said. “They believe that they believe that they’re not ready, or that their team is not good enough.” Fidu, meanwhile, wants to be easy enough that schools can set things up in 48 hours and have a fully customized-solution.
Every school, heck, every organization, would love a seamless platform that lets you automates academic, administrative, financial and communication processes. The challenge is that adoption takes time.
Lightspeed partner Mercedes Bent says fintech payments in Latin America are rapidly growing every year, thanks to digitization and banking adoption. “China saw private school enrollment grow from 10% in 2003 to 35% in 2019 (before crackdown) as GDP per capita rose. We expect that may happen in LATAM too,” she added. That said, digital growth could be threatened by slowing venture activity in the region, recent data shows.
Bent argued that the company stands out from competition from both a scale and focus perspective. “Other players are doing a vertical fintech play or school SaaS play – we hadn’t seen one with this scale doing both,” she said. “Fidu already has more schools than all the other startup players in the market.”
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