One of the causes of this problem is said to be the lack of ability to pay costs related to education. To solve this problem, many households have decided to choose a loan solution. However, another barrier is set up when traditional banks and financial companies still have many limitations in borrowing capital, especially in cases of borrowing to pay for education costs.
Rootopia - an ed-fintech startup is trying to eliminate the above barriers by helping users easily access finance to serve educational needs. In early September 2022, ThinkZone Ventures decided to invest in Rootopia because of the humane values that the startup brings to society as well as the startup's potential and development opportunities.
A few words about Rootopia.
Rootopia is currently a potential startup in the field of supporting Vietnam's education ecosystem, providing financial solutions for educational goals. Here, Rootopia connects parents, students and pupils with financial sponsors. Parents, students and students who want Rootopia to support educational expenses will apply for financial sponsorship by providing proof of courses and other information as required by the platform. There is no limit to the study program, in addition to high school and university programs, foreign language skills courses, programming or art programs, and high academic programs such as CFA, MBA, etc. can all be registered for sponsorship on Rootopia.
When registering on the platform, parents will be the registration representatives for pupils and students, and for students who are working and have a stable source of income, they can register themselves.
Rootopia is currently making efforts to connect with schools and centers, aiming to reach a wider audience with students. Through the solution that Rootopia brings, schools and centers will be able to streamline the process of connecting with students to collect tuition as well as reduce financial pressure and limit the increase in the number of students dropping out of school midway. Although just in operation, Rootopia has currently connected with more than 60 schools, and will continue to expand cooperation with schools in more than 10 provinces and cities to reach a group of parents with long-term orientation for their children's educational path.
Sharing about the value of Rootopia, Mr. Truong Bomi - Founder & CEO of Rootopia said: "The investment from financial sponsors will be paid directly to the school, ensuring that the money raised will not be used for the wrong purpose. Besides, although it operates in the form of lending, the user experience on the website is very natural and appropriate. There are many users who, after using Rootopia's form of sponsorship, continue to return to register for financial sponsorship for their students. other study programs, and this number is constantly increasing.”
In the first phase, the most dynamic source of capital that Rootopia mobilized was capital from individual sponsors. Each sponsor can invest at different levels depending on each case, and each case can have up to dozens of investment participants. In addition to raising capital from individuals, Rootopia is also currently targeting larger sponsors such as businesses or financial institutions.
Besides, an advantage of Rootopia is that all procedures are carried out completely online right on the platform, whether the person needs to register for financial sponsorship or is a financial sponsor. Rootopia is currently applying the credit scoring model and thanks to the strength of data, the application processing process is extremely fast and compact. However, the platform still ensures a high level of reputation for each transaction.
ThinkZone Ventures highly appreciates the market opportunity for a pioneering startup in solving the problem of education costs - Rootopia.
Most Vietnamese parents and students often pay all tuition fees or expenses related to the study process in cash. Therefore, the use of financial leverage such as student loan models abroad is almost non-existent in Vietnam.
Besides, regarding the issue of solving financial needs for education, traditional banks or financial companies currently do not have packages specifically for tuition fees, the main reason is due to lack of appraisal capacity and recovery ability of the group of borrowers for education expenses. It's easy to see that banks are focusing on campaigns to promote credit card activation, but of the 35 - 40 million people with bank cards, less than 10% of them have credit cards. As for financial companies, they do not focus on education, because the loans are often small, while the interest rates of financial companies are quite high. Therefore, the market opportunity for Rootopia is very open, and this market is still quite new, which means this is a great opportunity for this ed-fintech startup to become a market leader.
The humane meaning of this model is also the driving force that motivates ThinkZone Ventures to accompany and carry out Rootopia's mission.
The income of Vietnamese workers is still quite low. According to the General Statistics Office, the average income per capita in 2021 is only 4,205 million/month, down 1.1% compared to 2020. Meanwhile, on average, each household spends more than 47% of their total income on children's education costs. Low income levels are already difficult to shoulder their children's tuition fees, and it's even more difficult when education costs continue to increase, especially for universities that are following a roadmap to increase tuition fees by 10% each year. This has also led to thousands of students dropping out or temporarily stopping studying each year. For example, at Ho Chi Minh City University of Food Industry, it was reported that there were more than 2,500 students with prolonged tuition debt.
In such a context, Rootopia's solution can help students reduce financial pressure on their families by registering for sponsorship on the platform. Instead of households having to pay all tuition fees for the entire course or course in a large amount of money, parents now only need to pay the interest and service fees in advance when using Rootopia's services. Rootopia will disburse money directly to the school, and families just need to split the tuition and pay the following months. Thus, students can still continue to study, and maybe later, after they have grown up, they will return and register as sponsors at Rootopia, continuing to give wings to the dreams of the next generation of going to school.
The capacity of the Rootopia team is also a key factor that helped ThinkZone Ventures make the decision to invest in this startup.
Rootopia's founding team is comprised of entrepreneurs with extensive experience in the financial sector, who have held Director/Head positions at large financial companies such as Momo, Techcombank, Zalo Pay, and Ernst & Young. Among them, Mr. Truong Bomi - Co-founder & CEO of Rootopia, has experience in operating startups when he was CEO of Ahamove - one of the largest on-demand transportation platforms in Vietnam. ThinkZone Ventures believes that the capacity and experience of the founding team is one of the decisive factors for the future success and development of the startup.
ThinkZone Ventures is very pleased to accompany Rootopia on the journey to realize the dream of education for millions of Vietnamese students. Not only financial investment, ThinkZone Ventures is committed to investing in Rootopia with the best support resources for this ed-fintech startup.