EduFi, a fintech startup headquartered in Singapore, has raised $6.1 million in a pre-seed funding round. Zayn VC leads the investment and contributions from Palm Drive Capital, Deem Ventures, Q Business, and angel investors.
Operating from Singapore, the startup is dedicated to simplifying the loan application process providing crucial financial support to students pursuing higher education.
EduFi intends to strategically deploy the acquired pre-seed capital, focusing on expanding its customer reach, refining its platform, venturing into neighboring countries, and launching additional fintech products, including student credit cards.
The overarching goal is to address the financial challenges faced by middle and low-income families in Pakistan, where more than 50% of their income is allocated to their children’s education.
EduFi has introduced an artificial intelligence-driven Study Now, Pay Later (SNPL) lending platform and a mobile app in Pakistan, addressing the absence of dedicated student loan products in the country.
Aleena Nadeem, the CEO and founder of EduFi, emphasizes, “This product is unprecedented. Until now, families requiring loans for educational expenses had no option but to resort to costly commercial loans.”
The prevailing practice involves users taking personal loans with high-interest rates and lengthy processes, a situation Aleena Nadeem aims to rectify.
In Pakistan, around 40% of students opt for private schools due to the poor quality of public schools, resulting in an annual expenditure exceeding $14 billion on education. Additionally, over 50% of the adult population in the country lacks access to financial services like bank accounts and insurance.
Nadeem, an MIT graduate with a background in institutions like Goldman Sachs and Ventura Capital, observed the financial challenges children face and identified the crucial need to bridge the gap between high school graduation and university admission, ensuring broader access to higher education for students.
The inspiration for EduFi’s mission came from Aleena Nadeem’s experience working at Progressive Education Network (PEN), a nonprofit organization providing free education to underprivileged children in Pakistan.
PEN provides free and quality education to underprivileged children. Nadeem highlighted the significant drop in the number of students pursuing higher education after high school in Pakistan and identified this gap as EduFi’s target area.
EduFi, in its two years of existence, has already formed partnerships with 15 universities, making its app available to approximately 200,000 students across Pakistan who need financial support for undergraduate, Master’s, and PhD programs.
The application process involves providing financial information, such as bank statements or a source of income and once approved, EduFi transfers the funds directly to the college’s bank account.
Nadeem envisions expanding this model across Pakistan’s entire college system through a government agreement.