A colleague was telling me last month that his daughter's name had moved up two places on a Class IV waitlist that had been frozen since November. The relief on his face was real, but it sat there at the same time as the arithmetic he had clearly done on the way in, because keeping the seat meant skipping the family's annual trip to Cox's Bazar this year, and probably the next, to make the fee structure work without breaking something else in the household budget. This essay is about the face he was making while he explained it.
The numbers on the page he forwarded me later did not add up in any conventional sense. Annual tuition at a well known school in Dhanmondi, by which I mean the half dozen institutions every Dhaka parent can name without prompting, sits well above what the same parent's salary line on the printed payslip suggests they can comfortably carry. I am being deliberately vague about the exact taka figures because the schools change their fee cards every September and the numbers I would have written down in May would be wrong by January, and because the structural point of this essay does not depend on the precise tuition being one number or another. Stacked on top of the tuition are the admission fees that can rival two months of tuition by themselves, uniforms, imported textbooks, the transport contract with the school van, swimming and music sign ups, and the annual donations everybody pretends are optional. The all-in number, for the household at the high end of the mid career professional bracket, ends up being a meaningful multiple of annual take home income, and that multiple is calculated per child.
The schools are, despite this, not lightly full but capacity full, with admission tests in October, waiting lists that give siblings priority in November, and an active trade in seats on the gray market for January starts that nobody quite calls a gray market because the polite word for it is "development donation." Pristica turns away applicants every year, while Moonbeams runs a separate admissions test for the transfers coming in from outside Dhaka, and Uncle Mind, the newest of the old guard, has a queue stretching back nearly two intakes. Pasha International, which started later than the rest and brought in a tighter curriculum, sells out faster than any of them, and even West Breeze and Clover Leaf, slightly further down the prestige slope, are places where the admissions email goes out in February for a September intake and the seats are gone by April.
If you described this market shape to a SaaS investor without telling them what the product was, they would recognise it instantly as a category where demand permanently exceeds supply, and where the customers will sell furniture, skip holidays, defer a car purchase, and quietly stop contributing to their DPS just to keep the account in good standing. Churn is functionally zero, because pulling the child out partway through the year is socially a disaster and academically a setback the parent will not risk, and pricing power compounds annually on top of that. The brand on the gate is the moat, and the moat widens every time a new school opens at a slightly lower tier and the older one becomes "the original," which is roughly the moment any private equity desk in Singapore would start using the phrase "golden goose" without quite meaning it as a joke.
The English medium school in Dhanmondi is, in the technical sense the SaaS world means it, the compounding revenue business analysed least of all in Bangladesh, and we have spent twenty years calling it a school instead of an asset.
To understand why the customer keeps paying past the point where the arithmetic breaks, you have to be honest about what the customer thinks they are buying. The parent at the admissions counter is not, in their own head, buying twelve years of pedagogy so much as an option, priced today, on the child's ability to leave Bangladesh in the second half of their twenties with the credential set an admissions officer at Cornell or NUS or Imperial will recognise without having to ask. If that option exercises, it pays out in remittance, in a permanent residency the household can rotate in and out of, and eventually in the parent's own quiet relocation to Toronto or Sydney to live near the grandchildren, with the school acting as the underwriting venue and the annual tuition acting as the premium the household pays to keep the option alive for another year. Branko Milanovic's Capitalism, Alone makes the case, with cleaner data than I can produce here, that the global middle class has largely figured this out, and that emigration arbitrage is now the single largest household investment strategy of the South Asian salaried class.
The schools, to their credit and to nobody's surprise, know this perfectly well. Brand positioning at every well known institution has shifted, over the last fifteen years, from "we teach the British curriculum to a high standard" to "where the previous batch is now." The annual prospectus reads like a pitch deck for a venture fund for the alumni network. The wall in the principal's foyer carries the universities the recent graduates have been admitted to, rendered large enough that a parent at a distance of three metres can read Cornell and Imperial and NUS and Toronto and McGill without reaching for their reading glasses. The product, in the marketing sense that matters, is not the chemistry lab; it is the credential pathway, and the school's pricing power is the brand's near monopoly over that pathway. Bryan Caplan's The Case Against Education takes signalling seriously without being cynical about it. In his vocabulary, the parent is paying for the signal, and the school is rationally pricing the signal to capture as much of its expected value as the market will bear. Caroline Hoxby's research on school choice suggests the same dynamic operates anywhere parents perceive a credential bottleneck.
What no one in Dhaka has yet done, and the omission is genuinely puzzling, is consolidate the market. The English medium category here is a fragmented set of mostly institutions owned by families, each with one or two flagship campuses, each running its own admissions process, each negotiating its own fee for licensing curriculum with Cambridge or Edexcel separately. The private equity playbook for fragmented service businesses with high margins, the one that consolidated dental practices in the US in the 2010s and veterinary clinics in the UK after that, applies here almost too cleanly. A holding company that bought three brands in the middle tier, professionalised the back office, kept the gate signage intact for brand continuity, and went to the Dhaka Stock Exchange with a projection of cohort revenue over five years would not struggle to clear the listing requirements. The reason it has not happened is part regulatory swamp and part founder reluctance. The brand premium attaches to the founding family in a way that often does not survive an acquisition, and the families who own the door know it.
The provocation, if you sit with the numbers for an afternoon, is that the first holding company to roll up three of the smaller chains without spooking the halo of the founding family is sitting on what would be the largest education IPO in the country's history. The category is bigger than most people realise. There are now over a hundred English medium schools in greater Dhaka alone, with a combined annual fee revenue that, on a conservative back of the envelope calculation, runs into several thousand crore. The supply of seats has not caught up to a generation of urban professional parents who decided, around the late 1990s, that Bangla medium was no longer the route they wanted for their children.
The uncomfortable part, which I want to name without sermonising, is that the parents paying these fees are not getting back what the prospectus implies they will. A meaningful fraction of the graduates do leave and the option exercises as intended, but a larger fraction does not, and the ones who stay back end up working in Banani at a salary that is not, by any honest accounting, a return on the multiple of household income their parents poured in for twelve years. The household's discretionary income was spent on a bet that did not pay out, while the schools collect the fees in cash up front, every September, with no clawback if the option expires worthless. This is the cleanest asymmetric information game in the Dhaka economy, because the school knows the base rate of graduates who actually leave, and the parent does not, since the prospectus only shows the graduates who made it to Cornell and never the ones now selling FMCG products in Tejgaon at a junior salary and trying not to think about what the household paid for the privilege.
I am not arguing that the schools are doing anything illegal or even strictly unethical. They are running a private business in a market that demands their product at any price, and the law of pricing power says they should charge what the market will bear, which is what they do. What I am arguing is that the Dhaka conversation about this market has not yet learned to call it a market. The vocabulary still treats the school as a venerable institution, the parent as a grateful supplicant, and the fee structure as a sacred document not to be questioned. The same colleague who skipped Cox's Bazar this year, when I tried this framing on him, did not disagree. He just said, with the tired half smile of a man who has done the math himself and chosen to keep paying anyway, that the bet was still worth taking because the alternative was worse. I did not have a good answer to that, and I notice I have stopped trying the framing out on people who are actually paying the fees.