Good morning [%first_name |Dear Reader%],

If edtech founders went to therapy sessions, I’m sure there’d be one particular question that came up every single time: how do I reduce my CAC (cost of customer acquisition)? 

Founders have tussled with high CACs ever since edtech took off in India. Most startups I spoke to early on in their journeys were looking to get to that ideal LTV (long-term value) to CAC ratio. Whatever you were spending on acquiring customers—whether that was online, on TVads, or a physical sales force—you wanted to extract as much value as you could out of it. 

That, evidently, hasn’t gone according to plan.

Just to recap, Byju’s, Unacademy, UpGrad, and Vedantu spent a combined Rs 3,043 crore (US$369 million) on marketing—loosely, CAC—in the year ending FY 2022. The K-12 and test-prep business models took huge hits, predictably, as schools opened up. So the downward spiral has been quick and painful.

But if we pan out a little from what seems like a tragic end-credit shot, there are dawn-y patches on the horizon—corners of the edtech universe that haven’t succumbed to heavy ad spends and interminable layoffs.