Sydney-based textbook rental company Zookal has just announced its latest funding round of US$550,000 led by former chief financial officer of US student hub Chegg, Omer Regev, who is currently the CFO of Gemini Israel Venture Funds, and Silicon Valley’s Filtro Investments. This round brings total the investment in the company to US$1.98 million.
Zookal was founded back in 2011 as a textbook rental platform. The company has since expanded to provide digital textbooks, digital course notes, online tutoring and internship opportunities. Zookal buys university textbooks, and rents them to students for half the cost of buying them. It now has a stock of about 10,000 books, with expected annual revenue to surpass A$1 million (US$940,000) within the next three months.
According to Ahmed Haider, Zookal’s Chief Executive Officer, the new round of funding will be used to “acquire early stage technology startups” in Australia, as well as investing in infrastructure and technology companies in the education space. 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.
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CEO Ahmed Haider also told StartupSmart that the company managed to close the investment round from Omer and Gemini Israel Venture Funds purely through Skype, without any physical meetings. He said,
“It’s very possible to raise capital externally without blowing the budget and flying all over the world. It’s difficult for local entrepreneurs, but we shouldn’t let that be a barrier.”
Currently, Zookal is focusing its expansion on densely populated English-speaking areas in Southeast Asia. It has already established a joint venture with partners in Singapore and Malaysia, with plans to enter the larger, more lucrative Indonesian market next year. They are also in the midst of setting up their head office in Singapore. Ahmed told StartupSmart,
“Asia is a bit like the Wild West for start-ups. You can set up shop and a week later they will have stolen your business, but we felt safe in Singapore. Singapore was a lot more attractive as a start-up environment than some of the other south-east Asian options, just in terms of how progressive they are about start-ups and how advanced they are in incentives and encouragement programs.”
The company has capitalised on Australia’s US$466 million textbook market for its initial growth and is looking for a slice of Asia’s US$12 billion sector. The company seeks additional funding to develop new services and scale its platform globally and will be meeting with investors in the US later this month.