Scale: How big can Malengo get?

Addressable market

On the demand side, UNESCO data indicate that there are 76.1m students who graduate from secondary school in low-income countries each year. Combining this figure with country-specific data on the share of people under 25 who want to permanently migrate to another country from the Gallup World Poll, we estimate that 22.2m secondary school graduates from low-income countries may want to study abroad each year.

On the supply side, an estimated 26.1m students start a BA program in high- and upper-middle income countries each year. Thus, existing capacity in high- and upper-middle income countries would have to increase by 85% to accommodate all potentially interested students from low-income countries.[1]

Countries for scaling

Table 1 provides an overview of study conditions in a select number of OECD countries. What these countries have in common is that they subsidize tuition fees, so that study costs are lower than e.g. in the US, the UK, or Canada, which are omitted for this reason. As a result, the cost of a degree ranges from USD 11,667 to USD 74,469, assuming that students have part-time jobs in the latter years of the degree (column 1). Combining these figures with OECD data on average salaries in these countries (column 2), students earn back the cost of the degree within between 2.5 months and 1.5 years of working (column 3).

To estimate the number of potentially available spots for foreign students in these countries, we collected all Bachelor programs taught in English or French. Based on informal conversations with universities, we conservatively estimate that each program has 30 spots for foreign students per year. This yields a total of 1.16m estimated spots for students from low-income countries each year. The total potential direct cost for this number of students is USD 25.2bn per year.

Table 1: Study conditions for low-income country students across countries

Country	Total cost of tuition + first-year living expenses	Average salary	Years of salary to earn back BA degree cost	Estimated number of spots for foreign students per year	Potential direct costs per year
	(1)	(2)	(3)	(4)	(5)
Belgium	$11,667	$55,590	0.21	30,540	$356,316,972
Austria	$11,967	$53,903	0.22	1,230	$14,719,150
Germany	$13,542	$53,639	0.25	2,835	$38,391,570
Norway	$14,235	$54,027	0.26	90	$1,281,150
France	$17,439	$46,481	0.38	1,008,210	$17,582,321,774
Switzerland	$28,702	$66,567	0.43	10,320	$296,203,523
Italy	$21,445	$39,189	0.55	1,170	$25,090,355
Portugal	$27,052	$38,759	0.70	2,280	$61,679,360
Denmark	$41,481	$57,150	0.73	1,950	$80,888,645
Netherlands	$45,793	$56,552	0.81	13,680	$626,448,816
Finland	$46,371	$45,698	1.01	3,180	$147,459,820
Sweden	$52,015	$46,495	1.12	3,390	$176,331,575
Spain	$51,432	$38,758	1.33	6,420	$330,191,368
Ireland	$74,469	$50,490	1.47	73,920	$5,504,768,256
Total per year				1,159,215	$25,242,092,335

Scaling timeline

Malengo’s scaling timeline is shown in Table 2. We expect to send 100 students to Germany in 2022. In 2023, we plan to add Belgium and France, followed by Austria, Italy, and Switzerland (2024); Portugal, Finland, Sweden, Netherlands (2025); Denmark, Spain, Ireland (2026); and Norway (2027). We project that the number of students can grow by a factor of about 3.3 each year. At this rate, the program will reach 1.12m students per year by 2030, for a total financing volume of USD 30.3bn/year (including administrative costs).

Table 2: Scaling plan for Malengo, 2022–2030

Country	Per-student cost	Estimated max # of students per year	Students per year
			2022	2023	2024	2025	2026	2027	2028	2029	2030
Germany	$13,542	2,835	100	250	1,000	2,835	2,835	2,835	2,835	2,835	2,835
Belgium	$11,667	30,540		100	250	1,000	4,000	16,000	30,540	30,540	30,540
France	$17,439	1,008,210		100	250	1,000	4,000	16,000	64,000	256,000	1,008,210
Austria	$11,967	1,230			100	250	1,000	1,230	1,230	1,230	1,230
Italy	$21,445	1,170			100	250	1,000	1,170	1,170	1,170	1,170
Switzerland	$28,702	10,320			100	250	1,000	4,000	10,320	10,320	10,320
Portugal	$27,052	2,280				100	250	1,000	2,280	2,280	2,280
Finland	$46,371	3,180				100	250	1,000	3,180	3,180	3,180
Sweden	$52,015	3,390				100	250	1,000	3,390	3,390	3,390
Netherlands	$45,793	13,680				100	250	1,000	4,000	13,680	13,680
Denmark	$41,481	1,950					100	250	1,000	1,950	1,950
Spain	$51,432	6,420					100	250	1,000	4,000	6,420
Ireland	$74,469	73,920					100	250	1,000	4,000	32,000
Norway	$14,235	90						90	90	90	90
Total students / year			100	450	1,800	5,985	15,135	46,075	126,035	334,665	1,117,295
Cumulative total of students			100	550	2,350	8,335	23,470	69,545	195,580	530,245	1,647,540
Direct cost / year			$1,354,200	$6,296,100	$27,029,900	$100,149,170	$276,475,520	$873,063,280	$2,584,116,790	$6,792,790,980	$22,120,178,610
Overhead / year			$500,783	$2,328,298	$9,995,657	$37,035,163	$102,240,647	$322,858,801	$955,606,389	$2,511,974,104	$8,180,042,050
Total cost / year			$1,854,983	$8,624,398	$37,025,557	$137,184,333	$378,716,167	$1,195,922,081	$3,539,723,179	$9,304,765,084	$30,300,220,660
Cumulative cost			$3,709,966	$17,248,796	$74,051,114	$274,368,666	$757,432,335	$2,391,844,162	$7,079,446,358	$18,609,530,169	$60,600,441,320

Financial needs 2022–2023

We expect to send 100 students to Germany in 2022, and 450 students to Germany, Belgium, and France in 2023. The total funding need (including administrative costs) for both years is USD 10,479,381, of which we have raised $850,000 as of March 2022, leaving a funding gap of USD 9,629,381.

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[1] About 9% of students in high-income countries are from abroad.