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arabee

Interactive, fun programme teaching Arabic to children

UAE
Market: Education, training
Stage of the project: Operating business

Date of last change: 23.02.2020
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Idea

arabee provides solid foundation in the Arabic language programme with original online content supplemented by physical resources for schools and families.

Current Status

We are between early-stage and growth stage.
We are a self-funded company generating revenue. We launched our paid subscription service for schools in 2018 after a successful pilot.

Currently we are B-2-B and have signed 14 schools with c.4000+ paid subscribers. We are finalising an agreement with Ta'aleem, one of the big education corporates in the UAE for another 8-10 Schools with 2000+ students starting March 2020.

We are expanding B-2-C, launching the arabee app on Google Play and Apple stores in April 2020 targeting families.

Market

In the UAE Arabic is mandatory in schools from Age 5-14; this gives us two distinct market segments (i) schools and (ii) families (private) subscriptions. There are over 580 private schools in the UAE with non-native children population estimated at c600,000.

Currently our typical school customer has signed on for 1-3 levels (currently available). We will have horizontal and vertical growth. Existing customers will take more levels for more year groups as they become available. We will add more schools.

So far, we have been focussing on UAE schools as teaching Arabic is federally mandated and this will build credibility. The family app is being launched in April 2020 and will allow us to expand internationally.

Globally we will be targeting families in developed countries and in Muslim majority countries which we estimate to be c. 20 million potential users from a total population of nearly 2 billion. We are projecting c. 2,000 subscribers from UK and USA, alone, which have a combined population of c. 6 million Muslims.

Problem or Opportunity

Teaching Arabic is mandatory in UAE, but most children hate studying Arabic and make little or no progress. After 5 years, 25,000 hours, most of these Children are struggling with the language despite their obligatory Arabic lessons. This is a tragedy for 2 reasons: some children cannot even communicate, and it is a waste of money spent on Arabic resources.

Government reports on the level of Arabic progress and attainment in schools show that 85% of UAE private schools fail to reach the Ministry of Education standards for Arabic.

Solution (product or service)

arabee is a language programme providing a solid foundation in Arabic. It has an easy to use interactive platform and complementary physical resources teaching all four skills (speaking, reading, writing and listening) and catering for all learner types: visual, auditory, kinaesthetic, reading & writing.

arabee’s approach is based on modern teaching methodologies and pedagogies. These are embedded within the structure and content of the programme culminating in progressive learning with maximum retention for students.

Designed specifically for children by teachers and experts in education and curriculum design; the visual and auditory design elements being based on a child’s preferences and selections. arabee is progressive, increasing in complexity as students' advance through the programme. It provides teaching guides and clear rubrics for outcomes; so, a child can be measured against what they know vis-à-vis what they should know after X amount of study. This is not linked to the learner’s age but to their years of study.

arabee has qualitative data - testimonials from stakeholders and quantitative data - an outstanding Dubai school using arabee programme showed 13% improvement in 3 months. Students tested using a baseline assessment and the same test 3 months later. The programme's efficacy is further proved by all the current schools renewing their subscription for 2019-20.

The primary motivation behind creating arabee was to provide an Arabic programme which has an immediate impact on children and makes learning Arabic enjoyable and easy. Based on a pedagogy of fun, arabee’s vision is to make children “Learn to love Arabic and Love to learn Arabic”.

All arabee's content is original and made in-house, with 3 levels completed to date and another by October 2020.

Competitors

We found these companies offering Arabic language resources online or in person, but none provide a complete solution and address only 1-2 of the 4 skills (listening, speaking, reading, writing): Arabian Sinbad, Dinolingo, Linguascope, Little Thinking Minds, Bravo Bravo, Abjadiyat, Rosetta Stone, Babbel, Little Pims, Language Nut, Arabic Online. Some of them cater for either adults or children or both.

A few, such as Little Thinking Minds, Abdjadiyat and Bil-arabi providing Arabic Language programmes. However, from planning to teaching and tracking, assigning home learning and reporting, no other company offers exactly the same product and services as arabee.

Market share is difficult to assess as there is limited public data available and many schools have been happy with the status quo. It is only in the last 5 years that the UAE government has made a real push and emphasised Arabic teaching and begun to link the school's overall rating to the Arabic language one which led to some schools adopting some of the programmes above but as an add on and not a holistic solution provided by arabee.

Advantages or differentiators

What makes arabee special and unique? arabee is being built in partnership with schools, teachers and most importantly the students. We use their feedback to build the next level of content, so we know it works. Teachers and students are the key. Our characters are based on a child's preferences using colourful visuals, music, songs and games to make it easy to remember and motivate children to want to learn more.

Our home learning feature launched in May 2019 has proved a major success and we are currently working on linking our systems with student management systems used by schools (Engage, Isams etc) to make uploading and tracking students a seamless process for teachers and school leaders.

We have a strong brand and customer loyalty with customer retention at 89%. Once we acquire a client, our high-quality product, customer relationship, data accumulated on each student’s performance, and our excellent customer service along with high switching costs, along with the prospects of losing the performance data and analytics held on arabee students, will ensure low churn.

arabee is more effective than existing approaches and it meets a need that is currently not being addressed by present teaching in schools and existing online products and programmes. Our teacher training is an intrinsic part of our core value and customer-focused strategy. Additionally, we are working hard to acquire governmental accreditation (currently under process) this will be key influencing factor for schools when buying an Arabic language programme.

Finance

Summary Projected Financials presented below assume full deployment of the funding required and additional equity. We have a subscription-based model with schools paying $US 10-16 per student per year and families $US 95 per year.

Revenue Projections
Cumulative revenue to Dec 2019 is c $US 95k. Having signed Ta'aleem and launching the family app in Q2, we estimate our revenues will grow significantly in Q3 & 4 of 2020.

Cost of sales
Creation of Physical Resources, content development, printing and associated costs.
Direct costs include hosting and support for the online portal. These are estimated to be $USD 500K by Yr4.

Fixed and variable cost (SG&A)
We estimate HR/ marketing budget to be the primary cost drivers being c. 65% and 25% of the total cost, respectively. The remaining 10% includes rent, admin and ancillary costs. We have assumed an amount for contingencies which is estimated at 5% of total SG&A. We estimate costs to be reduced as content has already been created.

Profits
When forecasting our revenues and markets we have used very conservative numbers in our subscriber growth assumptions. Based on these, we estimate the business to break even by Break even by FY 2021/2022, scaling up to c. 25% EBITDA margin for the FY 2023/24

Business model

arabee has a subscription model - schools pay an annual subscription per student for using the online platform. Complementary physical resources – flashcards, games, which enhance the learning experience are sold separately to the online subscription.

The online subscription includes teacher/management/admin logins, teacher training and planning session, tracking, online home learning and student logins for access from home, as well as support throughout the year from the school support team.

arabee’s current focus is on acquiring more schools and acquiring governmental accreditation.

Money will be spent on

Investment will be spent on:
1. Acquiring more schools
a. We are primarily focused on accelerating our target of reaching 50 schools in UAE by year 4
2. Launch Family App
a. The funding will be used to aggressively to launch the app to convert school users to home users
b. provide a curriculum based Arabic learning tool for families globally who are interested in getting a solid foundation in Arabic
3. Content development
a. We will continue with our content development to reach our target of creating 7 levels

Offer for investor

Our valuation target reflects the scale and growth we believe arabee can attain. Significant capital needed to launch the product has already been provided by the founders. Further investment is primarily for marketing and scaling. The percentage dilution will depend on the investment size and additional benefits or services that the investor can offer.

Team or Management

Risks

We see two primary risks to our product:

(i) competition - currently the competition do not provide the complete language package as outlined in the two questions above. To replicate what we have built would require our competitor or new entrant to have very deep pockets and even then they would need time to create the content, launch and gain market share.

(ii) pricing - arabee is competitively priced to the current offering available it is unlikely that that these programmes will go below US$10 - 15 per student as this is industry standard

Incubation/Acceleration programs accomplishment

Part of the following accelerator programmes/ organisations
Sheraa (Sharjah Entrepreneurship Center), Sharjah UAE May-October 2019.
Ibtikari StartAD, New York University Abu Dhabi, UAE Oct-Feb 2020
Dubai Chamber of Commerce, UAE - StartUpHub ongoing support and market access

Accepted to the following accelerators:
C3 Social Impact Accelerator UAE (starting March 2020)
Sheraa Market Access UAE (starting End of Feb 2020)

Won the competition and other awards

Winner Pitch@palace UAE 2019
2nd prize Smartpreneur 4.0 2019
Semi-finalist MIT Arab Startup Award 2019
Finalist GITEX Supernova 2019

Photos

Photo 1 - Interactive, fun programme teaching Arabic to children
Photo 2 - Interactive, fun programme teaching Arabic to children
Photo 3 - Interactive, fun programme teaching Arabic to children
Photo 4 - Interactive, fun programme teaching Arabic to children
Photo 5 - Interactive, fun programme teaching Arabic to children
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Idea
Current Status
Market
Problem or Opportunity
Solution (product or service)
Competitors
Advantages or differentiators
Finance
Invested in previous rounds, $
Business model
Money will be spent on
Offer for investor
Team or Management
Mentors & Advisors
Lead investor
Risks
Incubation/Acceleration programs accomplishment
Won the competition and other awards
Invention/Patent
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