AT THE Gatina branch of Bridge International Academies, on the outskirts of Nairobi, Nicholas Oluoch Ochieng has one eye on his class of five-year-olds and the other on his tablet. On the device is a lesson script. Every line is written 7,000 miles away, in Cambridge, Massachusetts.
There an American team analyses 250,000 test scores every ten days from Bridge’s 405 Kenyan schools, and then uses the data to tweak those parts of a lesson where pupils find themselves stumped. Teachers, if they are instructing the same grade level, give identical lessons, and timetables are standardised, too. So when Mr Ochieng’s pupils read from their books, the same words should be reverberating off the walls of each Bridge nursery.
That chorus should soon grow louder. Founded in 2008, Bridge has grown into one of the world’s largest groups of for-profit schools—and the largest targeting poor pupils. It has 100,000 pupils spread across Kenya, Liberia, Nigeria, Uganda and India. Bridge says it aims to teach 10m children—the size of Britain’s pupil population—within the next decade.
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Bridge’s ambitious target sets it apart from the low-cost private schools that educate more than a fifth of pupils in poor countries, but that remain little more than cottage industries in each place. So too does the strong reaction to it. In November Uganda’s high court upheld an order that Bridge close its 63 schools there, alleging that it opened branches without permission. (Bridge has been granted a stay of execution and is lobbying the government to let it remain in the country.) And backed by Education International (EI), a global group of teachers’ unions, Kenyan and Ugandan unions and their political patrons have campaigned tirelessly against it.
Many of Bridge’s critics simply hate that it seeks a profit. Lily Eskelsen García, a vice-president of EI, calls Bridge’s model “morally wrong”. It is ironic, then, that it is consistently loss-making. That often goes unnoticed, because less attention has been paid to Bridge’s business model than to its teaching aims. Its biggest challenge, indeed, may well be financial.
Its $140m or so in equity capital comes from several investors, including Bill Gates, Mark Zuckerberg and Pierre Omidyar, who founded eBay, an online-auction giant, as well as from venture-capital funds such as Learn Capital and Novastar. It is often compared to companies from Silicon Valley: the “Uber of education” is one faddish analogy. Bridge recognises that making money by educating the children of parents who pay a mere $71-122 per year (excluding uniforms and lunch) calls for Uber-style disruption. Its school mottos are standardisation, automation and performance-monitoring. It builds its schools in just one month, for example, using one of only three design templates. Many parents in Kenya pay using M-Pesa, an efficient, low-cost mobile-money provider.
Also central to its business model is the way in which it uses technology to manage its key resource—teachers. Parents appear convinced that its teachers achieve far more than those in the state system. Technology allows close monitoring of what goes on in the classroom, right from the moment teachers join Bridge’s internal training programmes. All teachers must follow instructions on their tablets. Bridge tracks their finger strokes to see whether they scroll to the end of lessons. Local teams of inspectors also keep tabs on whether pupils understand the material.
Bridge pays its teachers more than those in other private schools, though a lot less than those in the state sector. And it offers extra pay to high performers in popular schools. That seems to encourage them to show up reliably. Bridge’s teacher-absenteeism rate is less than 1%, whereas in Kenyan public schools, according to the World Bank, 47.3% of teachers are absent from the classroom when they are supposed to be teaching.
It is true that so far, the hard evidence of the effect that Bridge has on pupils’ results is suggestive rather than definitive. Bridge’s own analysis claims that the firm boosts the performance of pupils in Kenya’s high-stakes national examination at the end of primary school. Another Bridge study suggests that its younger pupils learn 13-32% more per year than similar pupils in public schools. Michael Kremer of Harvard University is leading a randomised controlled trial involving Bridge that will begin to report next year. Even without conclusive evidence, the demand for Bridge’s schools is high (at least where political opposition is low). New ones in Nigeria, Liberia and India were quickly oversubscribed.
Still, the high upfront costs associated with its business model—its academic team in Cambridge, for example, is expensive—mean that just like many a Silicon Valley hopeful, it is quickly burning through investors’ cash. Parents are opting to pay for Bridge, but not yet in large enough numbers to deliver a profit. One presentation to investors in 2016 promised a “multi-billion dollar opportunity” with projected net earnings of nearly $250m by 2025 and revenues of almost $750m. The firm releases few numbers, but today its net losses are estimated at about $12m per year on revenues of no more than $16m.
Shannon May, the firm’s co-founder, answers that Bridge has always been clear that it has “a long-term, leveraged business model”. The firm has raised prices in India, where fees are about $122 per year, roughly $50 more than in its African markets. Ms May estimates it will break even within three years, by when she expects it to have 500,000 pupils globally. But one investor in Bridge says he would be “astounded” if it broke even by then.
The financial pressure may not build too quickly. Having such well-known backers may mean that, in the words of one philanthropist, “Bridge is too big to fail.” As well as its private investors, the company is also funded by the World Bank, and by the governments of Britain and America (as part of a shift towards spending development cash on private-sector projects rather than on aid). They are likely to be patient—so long as Bridge grows.
If pupil numbers and prices do not climb fast enough, the firm could find other ways of making money. “We are not just a school system,” says Ms May. When in 2009 she tried to buy uniforms and building materials from local suppliers in Kenya, she found it was cheaper for Bridge to make them itself. The company has become a big manufacturer of doors and desks, and in 2013 and 2014 it was Kenya’s largest. In Lagos State, Nigeria, where it has 23 schools, it sells other add-on products, such as school sportswear. Bridge has also suggested to investors that it could use its data on fee payments to sell credit scoring or financial products. It would like to use its brand to offer health insurance.
Another opportunity within its existing, core business is for Bridge to run publicly funded schools rather than just compete with them. It estimates that in poor countries this market could be worth $179bn, versus the $64bn private market. It has taken a first step in Liberia, where Bridge is part of a pilot programme in which private operators take over the running of 90 public schools—an approach similar to that involving charter schools in America, where independent operators such as KIPP (Knowledge Is Power Programme) have run partly subsidised, fee-free schools for more than two decades.
Such public-private partnerships would require good relations with governments. The record there is patchy. In Bridge’s first two markets, Uganda and Kenya, growth has stalled. The future of its schools in Uganda is uncertain. In Kenya, Bridge has not opened a new school since 2014 as parents have been put off by the (often wild) claims of the firm’s opponents. The average number of pupils per class in the country has fallen from 30 in 2014 to nearer 20. That has led to a dip in total pupil numbers. To reach its next 400,000 pupils—and meet its target of breaking even within three years—Bridge is relying on highly optimistic growth projections for India and Nigeria.
That does not stop some development types worrying that with its patient, generous shareholders, Bridge may come to dominate the publicly funded school sector in several places. Because it needs to expand rapidly to break even, they reckon it will seek to run as many publicly funded establishments as it can. That in turn, they fret, will give Bridge too much power over weak governments. It could even use its growing monopoly power to raise fees.
There are plenty of ways to avoid such an outcome. Contracts can hold Bridge—and other operators—accountable for improving kids’ learning. Contracts can also specify an agreed cost per child. If Bridge falls short, children can be returned to the state system or moved to another chain.
“If you think public schools can solve this problem alone it is wishful thinking,” says George Werner, Liberia’s minister of education. He points out that critics of Bridge and other private groups should remember the status quo. Last year just one student out of 42,000 hopefuls in Liberia passed an exam that allows pupils to apply for universities. In 2013 no candidate did. Scandalously few children are learning well in public schools. The problem of teacher absenteeism shows little sign of improving. Today, therefore, the problem for pupils seems to be the same as for Bridge itself. It is not that the company is too big. It is that it is too small.