Nicolas Jimenez, founder of Argentina-based startup Fidu, has convinced more than 1,000 schools in the Latin American region to invest in the groundbreaking edtech startup.
The trust wants to build a new operating system for Latham schools, so institutions can digitally manage everything from finances to school-wide announcements. The company, co-founded by Jimenez, Caterina Carreno and Ariel Manduca, announced today that it has secured $5 million in funding from Lightspeed Venture Partners, NFX, Imaginable Futures and Broom Ventures. It also received funding from regional founders, including Rapi’s Felipe Villamarin and Andres Bilbao, Auth0’s Matias Woloski, Despegar’s Robbie Suviro and Frubana’s Fabian Gómez.
Here’s how the startup’s first products work: School administrators can use the Fidu app to send tuition and fees to parents, and payments are then made by recipients over the phone. The startup is building technology to “get to know the school’s customers better” to make it easier to understand how stable the school’s income is. Once he has a better understanding of that information, he wants to provide guaranteed income financing to schools. Faydu’s income financing products are currently being tested in Mexico City and Bogota.
Jimenez said schools in Latin America are working on paper, WhatsApp groups and email. “The big challenge here is how we can create this operating system that is very easy to use for schools to get online and solve major administrative tasks. It’s a very Latin American solution, and it’s very different to how things work in the territory,” added the founder. Reinforcing its approach to being an alternative, Stack has built a custom app for schools to connect with families.
As Jimenez explained, most schools only receive money, which they deposit at the school and keep later. It is “financially inefficient” and “not very safe for schools and families who want to divert money elsewhere… High-income schools may accept additional payment options, such as wire transfers, but it is still very limited.”
The co-founder says that the startups that came before him made schools “scared of getting into new technology.”
“Most schools use inefficient (and mostly offline) administrative processes, which means that school administrators spend +70% of their time on bureaucratic tasks instead of teaching,” he said. “Few of the schools that use software, use older systems that are too complex to use and end up taking more time than they save. This is why school owners are often afraid to adopt new technology because they have had bad experiences in the past.
“It’s made this a bad first experience in a lot of schools,” he said. They believe that they are not ready or that their team is not good enough. For its part, FIDE wants to make it easy for schools to be able to set things up within 48 hours and have a fully customized solution.
Every school, heck, every organization, will love a seamless platform that lets you automate academic, administrative, financial, and communication processes. The challenge is that adoption takes time.
Lightspeed partner Mercedes-Benz says fintech payments in Latin America are growing rapidly each year thanks to digitization and bank adoption. “China has seen GDP per capita increase from 10% in 2003 to 35% in 2019 (before the controls). We expect this to happen in LATAM as well,” she added. That said, recent data suggests that it could threaten digital growth by slowing venture activity in the region.
Bent argues that the company stands out from the competition in terms of both scale and focus. “Other players are making a vertical fintech play or a school SaaS play – we haven’t seen one doing both at this scale,” she said. “Fidu already has more schools than any other startup player in the market.”