Local startup Zookal raises $600K, ready to disrupt Asian textbook market
Australia’s largest student portal, Zookal, raised AUD$600K in its latest investment round led by CFO of Gemini Israel Venture Funds, Omer Regev, and Silicon Valley’s Filtro Investments. This round brings total investment in the company to $2.1 million.
Zookal was founded by a group of university students who saw a gap in the market for more affordable access to educational resources. Its largest service offering is Textbook Rentals that provides a faster, easier and cheaper alternative to what is available in the Australian market, solving one of the biggest pain points for budget-conscious students.
Ahmed Haider, Zookal’s CEO says “Textbooks were the biggest pain point for me as a student so the idea came from a personal experience of going nearly broke every semester to fork out for textbooks, and I wanted a better solution to help students.”
“I realised that most students were renting anyway by buying it brand new and and then selling it later, we just made this process easier and more efficient.”
When presented with the question of why he chose to pursue entrepreneurship as a career, Haider quotes Isaac Newton: ‘If we have achieved anything it is by standing on the shoulders of giants’.
Much of his inspiration to become an entrepreneur came from meeting successful people like Mitch Harper from BigCommerce, Michelle Deaker from One Ventures, Mike Cannon-Brookes from Atlassian and David Stevens from Brennan IT.
Zookal’s business model works through “simple unit economics”. Haider says they purchase books at a discounted price from wholesalers and rent it out multiple times to get return on investment.
“We focus on books we know will run for multiple years which allows us to get compound growth whilst still providing a compelling value proposition to customers to get their required texts for a fraction of the cost,” he adds.
While their service lines are profitable, they are focused on growth. As such, they reinvest a significant amount of their profits into the business.
“Zookal is still in its startup phase and we would much rather have growth than profits in these early days. This will change as we mature as a business,” says Haider.
While they’ve experimented with a number of marketing strategies to reach students – from dressing up in a giant monkey suit and handing out flyers, to giant billboards and advertising on the sides of buses – the method that delivers the best results is word-of-mouth referrals.
Haider says, “if you build a great product and offer a pleasant experience people will talk about it.”
Zookal has attracted a further $600K in funds, adding to a total investment capital of $2.1 million.They’ve capitalised on Australia’s $466 million textbook market for its initial growth and is looking for a slice of Asia’s $12 billion sector.
The new funds will allow the company to build on their foundation and expand their services to densely populated English-speaking areas in South East Asia.
“The funds will help Zookal build on its foundation. We will look to acquire early stage technology startups in Australia and invest in infrastructure and technology companies in the education space,” says Haider.
“Investment funds will also go towards Zookal’s expansion into Asia to provide an alternative to the high price of textbooks and to counter the prevalence of photocopying.”
Haider admits, however, that international expansion is going to be one of their biggest challenges yet.
“It’s like starting all over again! You have to spend a lot of time understanding the market, the new culture, the environment, the languages etc. This can be mitigated by finding great local partners or staff,” says Haider.
Proactive in their approach, the company has already established a joint venture with partners in Singapore and Malaysia, with plans to enter the larger Indonesian market next year.
Their focus this year was on business development and expanding their core offerings, so their goals for next year is to dominate the markets they already are in and refocus their attention on core service lines to gain maximum market share.
For more information visit: www.zookal.com.