The US K-12 edtech market contains approximately 3,500 institution decision-makers (e.g., school-boards, superintendents, etc), 3.4 million classroom teachers, and 50 million students. While estimates of annual spending per student vary, a conservative estimate ranges from $6,000 - $25,000, which takes into consideration not only public school systems, but also charter and private schools.
The US post secondary edtech market contains approximately 15,000 institution decision-makers (e.g., institution presidents, heads of procurement, etc), 673, 200 teachers / adjuncts / instructors / professors, and 16.8 million students, with an average annual spending per student of nearly $44,000.
Refer to table: Table 1. US Market Size
State & Regional Market Size
When the US K-12 edtech markets are further segmented by state and region, there are 4,800 K-12 institutions in the state of New York, and 16,000 in the entire northeast region (i.e., DE, ME, MD, MA, NH, NJ, NY, PA, RI, VT). New York state has nearly 241,400 teachers, and 2.8 million students; whereas, the northeast region has nearly 650,000 teachers, and 8.0 million students. Finally, New York spends an annual average of $24,000 per student. When expenditures for students are averaged over the ten states in the region, annual expenditures per students decrease to about $17,000.
Market research indicates that the post secondary edtech market contains 298 institutions in the state of New York, and nearly 900 in the entire northeast region. New York state has nearly 32,000 teachers / adjuncts / instructors / professors, and 1.3 million students; whereas, the northeast region has nearly 112,000 teachers, and 3.7 million students. Finally, New York spends an annual average of $14,000 per student, and the northeast region spends and annual average of $15,000.
Refer to table: Table 2. New York & Northeast Region Market Size
Given the size of the market, annual growth rates, estimated annual revenue of the web-sites / applications / platforms in this segment of the edtech market, R & O expects to generate $2- $4 million in annual revenue based on state and regional sales within 2-3 years. This would roughly require enterprise contracts covering 66,700-133,400 students in K-12, or enterprise contracts with higher-ed institutions covering 40,000 - 80,000 students. These sales numbers are based on the average amount spent on instruction for a single student in New York state and the northeast region.
Taking into consideration the projected expenses against projected revenue, R & O expects to return initial investments (approximate range $625-$750k) plus 20% within 4-5 years of product hitting the market.
Refer to table: Table 3. Client numbers to receive projected revenue (minus customer support)
First Year Expenses
First year expenses are projected for three main categories: salaries and benefits, marketing, and additional operating expenses (e.g., office, supplies, utilities, etc). The largest proportion of these projected expenses is dedicated to salaries and benefits ($395 -$510k). Due to R & O's blended marketing and customer support approach, the projected proportion of expenses dedicated to marketing is somewhat high; however, justified based on marketing plan and potential return on investment. Refer to table: Table 4. Projected first year expenses