University Challenge: Edtech Tribal attempts to weather storm of budget crisis in academia – UKTN

Universities are in trouble. Budgets are tight, a quarter of leading UK higher education institutions are cutting staff and student recruitment for almost every kind of degree fell in 2024. 

The cause? Perhaps it’s tuition fee caps and rising costs, but ultimately, there is a real concern that they are unable to bring in enough international students, who pay significantly higher fees than their domestic counterparts. 

This also poses problems for businesses who work with academia, such as Tribal, a major provider of software products for universities. Its services range from timetable systems to student engagement software to bursary and scholarship management, it is involved in almost every aspect of digital university life. 

The London-listed edtech saw its shares tank as much as 13% after it reported its 2024 results on Thursday. While it managed to achieve a 6% revenue bump – reaching £90m – its pre-tax profit of £5.9m represents a more than 30% drop from three years prior, the start of the company’s “five-year transformation” plan. 

“The universities are challenged. There’s no doubt about that,” Tribal CEO Mark Pickett tells UKTN. 

There may be problems in the sector, but it is also in these problems that Pickett sees opportunity. 

The company is strategically shifting to selling its software as a cloud-based subscription SaaS bundle, which Pickett said would “provide much more value to customers”. 

This would amount to higher prices and therefore “more ARR for us” and he believes the universities will be happy to pay those prices because “all customers know that they will have their student management system in the cloud. It’s really a matter of when, not if, and they often have a lot of technical debt they have to go through…anything we can do to proactively help them reduce that cost is a benefit”. 

According to Pickett, many university student management systems are up to 20 years old and “very inefficient”, so while contract costs may be higher, he believes it will result in long-term savings for clients. 

The area Tribal thinks it can make an impact is in international recruitment. The company is launching a cloud-native product recruitment portal that will make schools more competitive in recruiting foreign customers. 

There is a hope that down the line this can create a flywheel effect wherein international student recruitment drives university revenue, which in turn gives them greater spending power. 

This benefit was caveated by the admission “higher education moves slowly”. This is a benefit that will be seen as late as two years after initial adoption. 

Nonetheless, Pickett and Tribal CFO Diane McIntyre are confident that the next 12 months will see “continued growth”, further rises to ARR and a greater number of customers paying subscriptions. 

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