Education and technology services platform K12 Techno Services, which runs the Orchids International School chain, will see its revenue increase from ₹383 crore in FY23 to about ₹450 crore in FY24 on the back of increased demand for its services from schools, according to a senior executive at the company.
The startup, which reported a profit of ₹39 crore in FY23, will remain profitable in FY24, said its founder and CEO Jai Decosta, adding that Ebitda should be close to ₹100 crore in the same fiscal.
The asset-light company provides content, marketing, software, curriculum, security and other services to schools across the country through its own brand, Orchids International School, and a curriculum and technology platform. It provides these services to school partners who own the land, the building and the licence. It works with more than 1,000 schools, of which about 100 operate under its Orchids brand. It plans to increase the number of Orchids schools to 150 in the next three to four years.
The edtech startup has seen increased demand from schools since the pandemic, Decosta said. “At any point of time we have about 200 schools seeking to partner with us, and we end up partnering with 12 to 15. Before the pandemic, we would have to go out and actually meet school officials and ask if they would partner with us.”
Talking about service requests from schools, Decosta said one of the company’s top-selling products is robotics and computer science. “Schools want to bridge the gap with what we can provide.”
Decosta said edtech is a huge market as India has 400,000 private schools, of which about 30,000 follow a national curriculum such as CBSE and ICSE. As part of its expansion plans, he said, the company may look at international schools (IB and IGCSE) in the near future as their numbers are growing rapidly. There were about 150 international schools in India in 2015, and 400 this year, he said.
The company also plans to launch an IPO in three to four years, Decosta said. He said the company would stick to its core strategy, which has worked well for it. Long-term agreements, he said, have helped it grow sustainably even as the wider edtech industry faces issues such as high burn and a dearth of funding.
For instance, Byju’s losses increased from ₹4,564 crore in FY21 to a staggering ₹8,245 crore in FY22. Vedantu’s losses increased 13% to ₹696 crore in FY22. Unacademy, which posted a loss of ₹1,678 crore in FY23, has laid off more than 2,000 employees over the past year to cut costs, according to reports.
“The contracts we sign with schools are for 30-50 years. We don’t sign one-year contracts or even 10-year contracts. If I have to provide services, I have to do so from nursery through to grade 10. Those students are going to consume my product and they need to go through a whole cycle of the product. That can only happen over a 10, 20, 30-year period.”
He added that the K12 (kindergarten to 12th grade) market has become completely in-person as most people have realised you cannot teach children through a device. “I don’t think it’s a function of the technology or the product, It’s just a function of the person. If you have to be on Zoom calls for eight hours a day, invariably you will open some chat window, you will play chess. It’s very, very difficult. I think the physical part of it is going to continue. How we add on a digital part is still being figured out.”
Last September the company raised funds from Kedaara Capital for a minority stake, providing a partial exit to Peak XV Partners (formerly Sequoia Capital India & SEA). The company has raised a total of $100 million in funding, and was valued at $280 million in 2021, according to data platform Tracxn.
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Published: 01 Mar 2024, 05:01 PM IST