Public and social (1 of 2)

Education and edtech

About 8 minutes to read in full, or 1 minute for the short version belowFacts checked 30 September 2026

In one minute

Schools, universities, tutoring companies and learning apps teach people, paid for by governments, parents, employers or the learners themselves.

The big idea: The person who pays (a government, a parent, an employer) is often not the person who learns, and governments set many of the rules on fees, profits and visas. Most costs are teachers and buildings, so a school or university lives on filling its seats and keeping students year after year, while an online learning company lives on the cost of winning each learner and how many come back.

One unit, in numbers: One student for one year at a private school in Dubai: AED 45,000 comes in, and AED 9,500 (21%) is left after its own costs.What is left is the unit's contribution, before the costs of the whole company. See the worked example
Typical margin: About 10 to 15 percent operating margin for listed education companies; premium full schools about 20 to 40 percent EBITDA; many consumer edtech firms lose moneyRoughly how much of every 100 of sales (or income) is left as profit after the running costs. More on margin
Capital intensity: MediumA fair amount of money is tied up, in things like stores, stock or equipment. More on capital intensity
The number to watch: Enrolment and capacity utilizationStudents enrolled, and students divided by available seats. The main driver of a school's profit.

Ask this first in a case

Who pays, and who decides: a parent, a government, an employer, or the student?

Words used above (2)

Capacity utilization:: Students enrolled divided by the seats available.
EBITDA:: Earnings before interest, tax, depreciation and amortization: a rough measure of operating cash profit.

The industry's other words are explained in Words to know (11).

On this page (17 sections)

How money is made

Tuition fees per student per year at private schools, universities and coaching centres.
Government funding per student or per programme for public schools and universities, sometimes paid to private providers.
Other school income: registration, transport, meals, uniforms and activities.
Edtech: subscriptions, one-off course fees, licences sold to schools or companies per user, and revenue shares with universities for online degrees.
Research grants and gifts for universities; international students often pay much higher fees than local ones.

Worked example: one unit

Unit economics means the money in and out for one unit of the business. Start from the revenue, take away the unit's own costs, and what is left is its contribution. More on unit economics

The unit: One student for one year at a private school in Dubai that is 80 percent full. Illustrative, rounded figures.
Line	Amount	ShareShare of revenue
Average tuition fee per student per year	AED 45,000	100%
Minus Teachers: 1 teacher per 12 students at AED 180,000 each a year	AED 15,000	33%
Minus Teaching assistants, administration and support staff	AED 8,000	18%
Minus Rent and building costs (AED 8 million shared across 1,200 students)	AED 6,667	15%
Minus Utilities, supplies, technology, marketing and other costs	AED 5,833	13%
What is left (contribution)	AED 9,500	21%

Check: AED 45,000 minus AED 35,500 of costs leaves AED 9,500.

So what: The school keeps about AED 9,500 per student, an EBITDA margin of about 21 percent, with staff taking about 51 percent of the fee. Staff, rent and most other costs barely change when a few seats are empty, and Dubai froze fees for 2026-27, so filling seats and keeping students (utilization and re-enrolment) is the lever that moves profit most.

Key measures(8)

Key measures (also called KPIs, key performance indicators) are the numbers people in this industry track. Ask for the first one or two early in a case.

Enrolment and capacity utilization
Students enrolled, and students divided by available seats. The main driver of a school's profit.
Student-teacher ratio
Students divided by teachers. It sets the biggest cost, and parents and inspectors watch it. Glossary: Student-teacher ratio
Average fee and allowed fee increase
The average price per student, and how much a regulator lets it rise.
Typical: Dubai allowed up to 2.35 percent for 2025-26 and no increase for 2026-27[4]
Re-enrolment (retention) rate
The share of students who come back next year. Winning a new family costs far more than keeping one. Glossary: Re-enrolment (retention) rate
Outcomes and inspection rating
Exam results, inspection grades and graduate jobs. They drive demand and, in Dubai, how much a school may raise fees in normal years.
CAC and LTV to CAC (edtech)
The cost to win a paying learner, compared with the margin that learner brings over time.
Completion and renewal rates (edtech)
The share of learners who finish a course, and who buy again. Low completion usually means low renewal.
Share of revenue from international students (universities)
How much fee income depends on students from abroad, whose numbers move with visa rules.

First questions to ask

When a case lands in this industry, these questions get you to the numbers that matter.

Who pays, and who decides: a parent, a government, an employer, or the student?
What does the regulator allow: fee increases, profits, visas, the curriculum?
For a school: what are capacity, utilization and re-enrolment, and how does the school compare with others on ratings and fees?
For edtech: what is the cost to win a paying learner against the margin they bring, and how many renew?
Is the school or product new and still ramping up, and how fast did similar ones fill?

Value chain: where the margin sits

The value chain is the steps a product or service passes through, from the first supplier to the customer. Each step below shows how much of the value it keeps. More on value chains

Step 1: Payers
Margin varies
Governments, parents, employers, and students themselves, often with loans or scholarships
Who pays decides what matters: price for parents, outcomes for governments, skills for employers.
Step 2: Recruiting students
Medium margin
Admissions teams, marketing, education fairs, and agents who recruit international students for a commission
Step 3: Teaching: schools, universities and coaching centres
Margin varies
Public schools and universities, private and international school groups (GEMS Education, Nord Anglia), test preparation firms (Allen, PhysicsWallah)
Public institutions do not aim for profit; premium private schools can earn EBITDA margins of about 20 to 40 percent when full.
Step 4: Curriculum, content and publishing
Medium margin
Publishers and curriculum owners such as Pearson, Cambridge and the International Baccalaureate
Step 5: Learning platforms and school software
Margin varies
Learning management systems, school administration software, consumer apps (Duolingo), online course platforms (Coursera)
Cheap to serve one more learner, but consumer apps often spend heavily on marketing.
Step 6: Exams, testing and accreditation
Fat margin
Exam boards, test makers (for university entry and English language tests), accreditation and inspection bodies
Few providers, and their certificates are required, so they have pricing power.
Step 7: Support services
Thin margin
School transport, meals, uniforms, school buildings and property owners

Profit pool: who keeps the money

Where in the value chain the profit ends up, which is often not where most of the sales are. More on profit pools

Profit sits where there is scarcity: well-rated schools with waiting lists, exam and test makers whose certificates are required, and trusted brands that can charge more. Consumer edtech that competes on marketing spend, and universities that depend on one flow of international students, have the thinnest and least reliable margins.

Cost structure(6)

The main costs, each as a share of revenue (the money from sales).

Teachers and other staff (private K-12 school; Taaleem in Dubai about half of revenue): 45 to 65 percent of revenue
Staff pay in school systems (average of OECD countries, a group of mostly high-income economies; a share of running costs, not of revenue): About 77 to 78 percent of current spending[2]
Buildings: rent or facility costs (if leased): 10 to 20 percent of revenue
Other operating costs: utilities, supplies, transport: 8 to 12 percent of revenue
Marketing and sales (private school): 2 to 5 percent of revenue; 25 to 50 percent at many growing consumer edtech firms
Technology (private school): 2 to 5 percent of revenue; 10 to 15 percent at consumer edtech firms

Benchmarks(7)

Typical figures for the industry, to check a client's numbers against.

Operating margin before tax, US-listed education companies: About 14 percent[1]
Staff pay as a share of current spending, OECD school systems: About 77 to 78 percent on average at primary and secondary level[2]
Dubai "Outstanding" private school fees, 2026-27: About AED 29,000 to AED 112,000 a year, depending on school and grade[6]
Taaleem (Dubai school group), nine months to May 2026: EBITDA margin about 38 percent (premium schools about 42 percent); staff about 92 percent of operating costs, roughly half of revenue; about 13 students per teacher[16]Nine-month figures leave out the summer months, which flatters the margin.
English universities in deficit: About 45 percent of providers modelled to report a deficit in 2025-26 if they take no action; sector surplus for 2024-25 projected at about 0.6 percent of income[3]The regulator linked the squeeze mainly to fewer new international students.
Canada study permit cap, 2026: About 408,000, about 7 percent below the 2025 target[14]
India school teachers: More than 1 crore (10 million) for the first time in 2024-25[8]

Typical cases(7)

Case prompts you might hear in this industry.

A school group is thinking of opening a new international school in Riyadh. Should it?
Our client is an edtech company in India that is growing fast but losing money. What should it do?
A UK university expects far fewer international students next year. How should it respond?
A private equity fund wants to buy a group of K-12 schools in the Gulf. What would you look at?
How many private tutoring students are there in a large Indian city?
A government wants to raise school quality in a region. Where should it spend first?
Dubai has frozen school fees. How can our school keep growing its profit?

Common traps(5)

Mistakes candidates make in this industry, and what to do instead.

Ignoring who pays: a parent, a government and an employer choose for different reasons.
Forgetting fee caps and profit rules, such as Dubai's fee framework or India's rule that schools be run by non-profit trusts.
Treating a new school's early losses as failure without checking the normal ramp-up of similar schools.
Counting edtech sign-ups instead of paying, active and renewing learners.
Assuming online learning always replaces classrooms, when hybrid models often keep learners better.

What changed, 2024 to 2026(6)

Recent changes a case could turn on.

Edtech reset. Byju's parent was admitted into insolvency in July 2024, while PhysicsWallah, known for low-price courses, listed on Indian exchanges in November 2025: lower-price and profitable models survived better.[11]
Online learning consolidated: Coursera completed its combination with Udemy in May 2026, creating a larger online skills platform.[12]
AI changed demand. Chegg cut about 45 percent of its staff in October 2025, saying AI search summaries had cut its traffic, while demand for AI skills courses rose.[13]
Student visas tightened. Canada set its 2026 study permit cap at about 408,000, and in England the regulator modelled about 45 percent of universities in deficit for 2025-26 after fewer new international students than planned.[3]
Dubai froze private school fees for 2026-27, after allowing increases of up to 2.35 percent in 2025-26, while 26 new private education institutions were planned to open for 2026-27 (7 schools, 17 early childhood centres and 2 universities).[4]
India regulated coaching: guidelines issued in January 2024 bar enrolment below age 16 and misleading promises of ranks, with states asked to enforce them.[9]

Players by region(7)

Well-known companies in each region. You do not need to learn them by heart; they help you picture the market.

Global: Coursera (combined with Udemy)
Duolingo
Pearson
Nord Anglia Education, international schools
Cognita, international schools
Cambridge and the International Baccalaureate, curricula and exams
Europe: Public school and university systems
Pearson (UK)
Cognita (UK)
Universities that rely on international fees, such as many in England
Middle East: GEMS Education (Dubai)
Taaleem (Dubai)
Aldar Education (Abu Dhabi)
Branch campuses of foreign universities
KHDA, Dubai's private school regulator
India: PhysicsWallah, listed in November 2025
Allen, coaching
upGrad, online degrees and skills (agreed in 2026 to buy Unacademy; India's competition regulator cleared the deal)
Byju's (its parent company has been in insolvency proceedings since 2024)
Southeast Asia: Ruangguru, learning app (Indonesia)
International school groups such as Nord Anglia and Cognita
Public university systems
United States: Public school districts
Chegg, homework help
Grand Canyon Education, university services
Stride, online schooling
Bright Horizons, childcare and early education
China: New Oriental
TAL Education

Words to know(11)

Linked words have a fuller entry in the glossary.

K-12 (glossary entry): Schooling from kindergarten to grade 12, about ages 4 to 18.
International school: A school that teaches a foreign curriculum, such as British, American, IB or Indian CBSE.
Capacity utilization (glossary entry): Students enrolled divided by the seats available.
Student-teacher ratio (glossary entry): The number of students for each teacher.
Re-enrolment rate (glossary entry): The share of students who return the next year.
Completion rate (glossary entry): The share of learners who finish a course they started.
EBITDA (glossary entry): Earnings before interest, tax, depreciation and amortization: a rough measure of operating cash profit.
CAC (glossary entry): Customer acquisition cost: marketing spend divided by the number of new paying learners.
Education Cost Index: The yearly figure Dubai's regulator uses to set the most a private school may raise fees.
Accreditation: Official approval that a school, university or course meets set standards.
Study permit cap: A government limit on how many student visas it will issue in a year.

Business model patterns

The ways of making money this industry follows. Spot the pattern in a new industry and you already know the first questions to ask.

Sources(17)

Facts checked on 30 September 2026. Worked examples are illustrative, shaped by these sources rather than one company's figures.

Go deeper and practise

Go deeper

The full lessons behind this brief, with sources and worked cases.

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Same pattern elsewhere

Industries that make money in a similar way. What you learned here carries over.