Good afternoon once again. Thank you all for participating in our event. Welcome to all of you. This is the 10th Croton Day in the history of the company. And this is a moment in which we see a little movie being played in our heads with many challenges, but also many achievements.
And we always come to this event to discuss with you the opportunities we have, the things that we can make real and how we can seize opportunities for at least 10 years to come. And this is the reason why we are here. We are here to talk to you about opportunities, the new things taking place in our business and also to give you a chance to question our strategies and discuss what we envision for the future. I would like to begin by thanking all of those who participated in the organization of this event. We know it's very hard work to get all presentations put together.
Ori, the marketing team also gave us great support in terms of the technology and also the events organization agency and also Croton's leadership. It's a great honor for me to be part of this team. So without further ado, let's take a look at the agenda of the day in brief, of course, but I think that you'll be able to follow what we'll see today based on this agenda. We'll start with Rodrigo Galinto on the new Croton era. Roberto Valerio will talk about the new opportunities in higher education.
Paolo de Taz will close this half of the day talking about higher education. Then we'll have a short break and we'll talk about K-twelve and Guido will close this section. And then we'll hand it over back to Rodrigo Galindo, who will talk about Croton's new governance. Finally, we'll have a Q and A and you all be able to participate in the Q and A for at least 30 minutes. So now let's begin our day, a day that I expect to be very fruitful and productive.
And of course, we're always open your criticism and your praise. So, Rodrigo Val Gallindo, can you please join us on stage?
Thank you. Good afternoon, everyone. It is a pleasure to be here with you again on Troton Day, our Investor Day, talking about our strategies and speaking about what we believe will be the future of our organization. We are more concerned in telling you what we're going to do to build the next 2 decades of our organizations. We're not going to announce any specific deals.
And it's not our goal today. On Croton's Day, we want to tell you how we're building the company so that it adds value. We'll be talking about our value levers for the next 10 20 years. Today is a landmark. That's why we talk about the new era of Croton today.
We're opening a new era for our company and that's what we will be talking about. We always say that our strategic choices tell a lot about us. So let us revisit some of the choices we made in the last 10 years that brought us till now because now we're making other choices that will lead us into the future. So I always say we made strategic decisions in the last 10 years. And these decisions have led us to make acquisitions or other initiatives.
We never made decisions case by case. We never bought a company just because it was good business. All of these transactions, they validated our strategy, the strategy we built for the company. And today, we brought 3 to highlight. The first in 2010, what was the decision behind that transaction?
Well, we decided to focus on efficiency and quality. And we thought we had room to improve efficiency and quality. What was the transaction that levered this strategy? The acquisition of Uni. So a new era started then, whereby we had more efficiency, more quality, all our financial indicators made progress.
So this acquisition validated that strategy. Same thing happened in 2011. In 2011, we believed in digitalizing teaching. Well, that was 8 years ago. Distance learning was not what it is today.
And I think we also brought our contribution to make it grow, to make that good business, top quality education, a good methodology to learn, but we believed in that in 2020. And how did we accelerate our process of penetrating distance learning? Well, by acquiring Unopar, 2 of the biggest transactions ever on the Brazilian market. So first, we have a strategy. And then we had the acquisitions.
That is, first, we decide our strategic position, where we want to go. And then we check whether we can use an acquisition to validate to evolve in this strategy. Now the third one in 2014, we believed that scale was a lever to add value. So it made a lot of sense to acquire Ayahuenguera, 3 strategic steps that were key to build today's Croton. And they added a lot of value.
If you look at the financial reports, all of these three strategic steps were warmly welcomed by the market and time has shown how they added good results to us. Now what results? First, a compound annual growth rate of 36% in 10 years in a row. This is net revenue compound annual growth rate. Now let's look at EBITDA or the operating profit.
The result is even better. We had a compound annual growth rate of 80% between 2010 2011, 80% growth a year that is we added a lot of value. The question is, have we really grown 80% our EBITDA? Yes, well, but shareholders were diluted in many of these transactions indeed. So if we want to look at the return to shareholders, let's look at TSR, the total shareholder return, stock price plus dividends and removing the effect of dilution, 5 20 percent TSR, that is 10.5 times higher than the benchmark, which was Ibo Vista.
This is how much value we added. But only financial value, what about academic value, quality? We have many indicators to look at the quality we provide. But one of them is a summary, the general cost index, IGC. We came from 61%, a satisfactory IGC in 2010 and now we have 96% in 2017.
So more than 35 percentage points growth. So in this era of consolidation and efficiency added a lot of value to investors, students and the society at large. So these are good results we produced. But then by the midpoint of 2017, we asked, if we repeat the same formula, can we add the same value in the next 10 years? The answer was no.
We have to rebuild the basis of this company so that we come to a new era generating a lot of value, but we didn't know how. So what did we do? We asked ourselves and we discussed what should be our strategic path for this new transformation. In December 2017, we involved more than 100 people in strategic planning who worked for more than 7 months meetings, workshops, 10 members of our leadership and we rediscussed all aspects of the organization. And the backdrop was the digital transformation.
We view digital transformation not only as technology helping us. For us, digital transformation, as we mentioned in previous earnings calls in the last 5 or 6 quarters, we want digital transformation as a mindset change, a new way of thinking, a new way of doing business. So in 2018 2019, we are building this new company we came here to present to you. What's the number one question we try to answer? Well, growing is part of our DNA.
We've been growing for the last 10 years. We want to continue to grow. So where are the opportunities to continue growing? And this strategic planning opened a new way for us. Giving us some tips.
In 2018 2019, we have to address our digital transformation, a cultural change that will bring to us new ways of doing business. And let's be transparent. When we began the digital transformation, we knew it was going to change the way we did business. But we did not know that we would find other business models that would open up new opportunities for us. This was only made clear when the digital transformation really started, when we all dived into it and what were the greatest conclusions of this process?
1, the strategy was focused on K-twelve and B2B. So focus on K-twelve seemed obvious, but B2B became our focus helped by the digital transformation, which helped us see that as an opportunity. And what was the strategic step we took to accelerate this? Well, we acquired Somos and we made the decision of also working in B2B Business Models in Higher Education in K-twelve and in B2C and K-twelve too. So the strategic focus is for us to work on K12 in B2B markets and the acquisition of Salmos accelerated the process for us.
But that was backed by a deep discussion about the digital transformation. We're still in the learning curve. We're learning every day. Today, what are we going to talk about? We're going to talk about the change we had to make to help the B2C and the B2B market and also the B2C higher education market, which has gone through to change also because of the digital transformation.
So we now have a new business structure, new brands, new work environments, the new workplace environment so that we can share all of this new business structure and a new organizational structure plus new governance. This is the new company we are announcing today. But the question we asked was, we're changing the whole company. What about the market? Because I mean, it is of no use to be ready to meet the needs of a market if the market is not there, if you have too much concentration, if the market is not there.
So we will begin the presentation talking about our addressable market for each business line. So let's begin from the higher education or post secondary education market. Does it make sense to continue to grow B2C? Do we have enough of a market to continue to grow? Well, today we have BRL 5,000,000,000 revenue and we're the number one player in post secondary education in Brazil, BRL 5,000,000,000.
And we have 176 units, 1410 centers for distance learning, 846,000 students and 96 percent of our institutions with a satisfactory IGC. Can we still grow? Well, this market is a $55,000,000,000 revenue market. It means we only have 9.1 percent market share. The 5 largest players have less than 40% market share.
What about in other Aviation. The first player has 39% of the market. Mobile telephony, 32% retail, 32%. And we can give you many more examples where you have much more concentration than only 9%, which is our penetration in higher education. We can grow organically or inorganically, but we know there is a market.
We have room to continue to grow in B2C in post secondary education. And the next market, B2B for postsecondary education. Let's open parenthesis to talk about our strategy in B2B for undergraduate programs. In the afternoon, we will be talking a bit more about the AdServe platform, but so that you understand our business model in B2B for post secondary education. Well, 3 years ago, we started to implement this concept of a platform for graduate programs.
So our graduate programs was separated, led by Paulo, and we started to provide full service graduate programs for Croton Institutions. So this is a company inside Croton providing graduate programs for Croton as a client. This graduate program company is growing 25% a year and with only one client, which is Croton. What's the next step? We want to provide all graduate program services available to over 2,300 institutions selling.
Graduate program services can be just 1 graduate program or the full service, so including technology platform, academic content and services, student intake, accreditation and employability. So we have a lot of room for growth. The platform is ready for graduate programs, and we can now begin to offer the same services for undergraduate. So today, we provide these services only to Croton, but they are now ready to be purchased by other educational institutions. Croton will be just one client in the platform.
We will have thousands of more clients using the services of this platform. What are the characteristics Well, in the first phase, we already have 176 Croton units and 2,000 centers being served by the platform. And we have 40 external clients with 20,000 students with services that came from Sarajevo. So the basis of this platform was the Sarajevo services. And it's growing 25% a year in the last 2 years.
In the 2nd year, it's grown even more than 25%. And we'll now begin the 2nd phase where we will provide graduate services to external clients and we will expand undergraduate services. So this business has a huge potential. But what is the size of this market today? We have 100,000,000,000 in B2B.
But what's the market size? Well, we're talking about a BRL34 billion market, a giant untapped market. And we can now consolidate all solutions to potential partners or clients. So we have a lot of room to grow and we want to grow with the success of companies that buy our services. We want them to grow and we want to be their partners in their growth.
So this is the structure, the service Mandala, we can now offer for graduate programs in the AdServ platform. And he will be talking about each one of these services in detail. This is the second business, B2B for graduate programs. Now let's talk about B2C. This business was accelerated with the acquisition of Somos.
We already had a few schools, Da Vinci, Lato Senso, Pitagoras. So now that we acquired SOMOS, we have 700 $1,000,000 revenue in B2C of K-twelve. So Somos is separated here in 2 different businesses. 1 is B2C for K-twelve schools and one is B2B, also K-twelve. B2B has BRL700 1,000,000 revenue and the market is huge.
What's the characteristic of the B2C K12 market? 1st, high fragmentation. The market is fragmented. Next, low professionalization. Next, efficiency opportunities.
These characteristics are very similar to the ones we found in higher education market, high fragmentation, low professionalization and a big opportunity to improve efficiency. We have 54 own units with recognized brands in 14 states and we are a reference where we operate. What is the market share we have and what is the total addressable market? We're talking about an addressable market of BRL 60,000,000,000 where we have BRL 700,000,000. So 1.2% only is our market share.
Look at the opportunities we have. Only 1.2% in B2C, higher education, 0.3% in B2B of Higher Education, 1.2% market share in B2C of K-twelve. So the 5 largest players have around 10% total market share and not a clear consolidator. So we have lots of opportunities in B2C of post secondary education. Now B2B K12.
B2B K12 is a platform we have that provides services to K12 schools. The business has been structured. We have lots of services available, and we will be talking about the opportunities we see in this business line. Today, we have $1,000,000,000 revenue, 4,000 schools as clients. Recognized and preferred brands, Anglo Pitalas PH, National leader in core content, that's the way they call learning systems, the main content used by schools.
And we have excellent N M results. So the business model is structured. It has been proven. Give you the ACV today, but we give you the ACV today, but we can already announce we will have important growth in the total number of contracts for 2020. So we're very happy with the opportunity we have here.
What's the characteristic of this B2B K-twelve business? This is business as a service. This is a platform as a service. And what are the characteristics of this business? So it is accredited as platform as a service.
Well, it is a subscription model. It is technology based. And because it is a subscription model, it has recurrent revenue. It's highly scalable, asset light and it has a high growth potential. That is why we say this is business as a service.
We already have a go to market, which is completely different for this platform and we already view this as business as a service. So let me give you some more color on this business and give you some more information, and Guyot will give you further information. So the potential market is BRL 25,000,000,000 or 4% market share is what we have. I mean, we have only 4% market share. So we have a lot of room for growth.
Now what are the services in this platform? Well, we have a $25,000,000,000 market potential, which we will capture using 2 different platforms of our business. The K-twelve platform includes 2 integrated platforms. 1 is content, the other EdTech platform. It has all the services that help schools teach better academic, pedagogical services for the school to have a more efficient process of teaching and learning.
What services are available today on this platform? All of these that have a brand, these are the brands that provide these services. We have core content, Maxi, Anglo, Pitaloras, Rey de Cristin, PH, providing core content services. Then languages with bilingual experience in English styles and social emotional programs called Ollider in me or The Leader in Me and then L'Oreal, Maestro and Bibloteca, Parr for digital learning and continuous teachers training with Profs. And so all of these services are already available for K-twelve schools on our platform.
And this is already working. What else do we have in the ad tech content platform? Team and academic, so all academic services that can be provided directly to a school on B2B or B2C and STEM Science Technology Engineering and Math. So all of these solutions are now being developed and they will be available in the next few months to our partner schools. And this is going to be a complete package of academic school in the content and EdTech platform, helping students to learn.
And then we thought, we want to be a one stop provider for schools, right? So what else do we have to offer to our schools so that we can be the solution for all problems the schools face? We decided we needed a digital services platform. So in addition to content services, we also commerce through the Livrofacio brand. And we have an array of other services to be made available, online enrollment, scholarship marketplace, digital marketing CRM, financial ERP and academic ERP.
A complete array of student acquisition because schools want to be efficient. They want to have a solid intake process. And so the claim here is that we can help schools because we have scale and technological sophistication, so we can help students attract and retain students. In addition to e commerce and the financial and academic ERPs. With that, we believe we can solve all pains of a school.
So you have content, ad tech and digital services helping schools teach better and also helping schools be better managed. So we support school management. This is the concept of our platform. Now let's look at the same services in a different structure. So the services in the Mandala can be seen at the top in gray and pink.
And you also see the brands, the total addressable market and our penetration, the penetration of SOMOS I'm sorry, the penetration of the services compared to SOMOS students. So we have BRL 6,000,000,000 as an addressable market, and SOMOS penetration is 33%. It means that if all schools that use at least 1 SOMOS core content material, if they decide to adopt all of the core content materials, we can reach BRL 2,000,000,000 that is we can double this number BRL 33,000,000 and make it BRL 66,000,000. Now in languages, we have only 1% penetration. Can you imagine how much we can grow?
Only 1% market penetration and social emotional programs, we have 5% market penetration. E Commerce, only 4% market penetration. So even amongst our own customers, we have big opportunities of upsell and cross sell. In addition to growing and expanding the number of customers, Today, 4,000 and we have 35,000 schools in Brazil that can become our partners, our revenue is $7,000,000,000 so a 3.9% market share. You see, we have a lot of room for growth in all business lines.
And this mindset change brought about by the digital transformation has helped us grow from $55,000,000,000 to $174,000,000,000 more than 3 times the initial addressable market we had. So the initial question has been answered. Do we have a market to grow? Yes, we do. If we have market to grow, let's be prepared to capture these opportunities.
So the new mindset requires a new business structure. I told you we were going to talk about the new organizational structure, brand architecture, workplace environment and new governance. So let's begin about the new business structure. Today, we become a holding with 4 companies underneath. It is a collection of companies under this holding with a B2C postsecondary education operation, a B2B postsecondary education, a B2C K-twelve operation and B2B K-twelve operation.
All of these four companies are already in operation. They have different maturity levels, different opportunities and we will be talking about each one of them. B2C post secondary, BRL 25,000,000, B2C has BRL 100,000,000, but each one has its own opportunities. And today, we're going to talk about the value of each one of these companies and the priorities of each one of these companies. In addition to these 4 businesses, I mean, these 4 businesses are up and running.
They are fully operational. In addition, for 2020, we're structuring a venture capital fund to invest in disruptive technology solutions. And these investments can be of a different nature. They can be minority investments, full acquisitions, partnerships, different business models. The fact is that we will be looking for disruptive solutions for education and or solutions that can help each one of our 4 businesses.
So the venture capital fund will be set up in 2020. Now going back to what we said before. The B2B post secondary has 55 market size, 9 60,000,000,000, 1.2 percent and B2B K12, BRL60 1,000,000,000, 1.2 percent and B2BK12, 4% penetration and BRL25 1,000,000,000 is the market size. They all have a different maturity level. And what are the opportunities we see?
A B2C Higher Education has opportunities to grow. Look at the difference between 9.1% market share and the percentage we can reach, but the name of the game for this business is cash flow. We must ensure cash generation in time so that it grows in time. It will grow in revenue, of course, it will. But this is a more mature company.
It has to generate cash. It's different from a high growth small company that has different challenges. Here, cash flow is the name of the game. Now B2B Higher Education, a small company, dollars 100,000,000 revenue. Here, the name of the game is high growth.
We have to grow fast in the next few years. Of course, we will continue to generate cash as we do now, but here we'll have to invest to grow and accelerate the growth of this business. B2CK12, the name of the game is operational excellence because here, I mean, we have been in post secondary for 10, 15 years. Now in K-twelve, we can improve efficiency, improve operations to capture more value for this moment of the company. And B2B K-twelve high growth.
We want to grow in B2B K12. So each business has a different maturity level, different challenges. So it makes sense for us to have a different management so that each one can tap its full potential. So what do we have in this collection of companies? Well, different models for different audiences, sizes and maturities.
But the holding company will be our backbone, guaranteeing efficiency, which is Croton's DNA. All services delivered to our customers will still be under the holding. So we're not going to lose efficiency with this new structure of the holding and the collection of companies. Everything we can share, we will continue to share. So Croton's DNA, which is efficiency, will not be lost.
Much to the contrary, it will be maintained, providing autonomy when the businesses need that to capture their value. Technology will be a driver for all 4 of them. And then again, flexibility, agility and their own identity in each business. So each company will pursue its own priorities depending on the moment of the organization. And we also spoke about identity, our own identity.
So let's talk about our new brand architecture. If we want to represent new identities, we need a new brand architecture. We have to make it really clear because now we have 4 companies, 4 different businesses under one holding. So let's see this market this brand architecture we're launching today. Well, the Crouton brand was consolidated as a leader in the B2C market of higher education and it is its main strength, B2C in post secondary education.
And it will continue working in higher education. So Croton will be our B2C post secondary.
This means that if Procter is now on its turf, B2C post secondary, we need a brand for our holding. And for the past few months, we have been working to create a brand that will be synonymous with everything we want to be as a company. So we have a brand for the holding and the other company. So let's see now what is the new brand of our holding. It was back in the '60s when a group of friends got together to create a prep course for university.
The name of this course, Pitagoras. This was a tribute to one of the most important thinkers of education and approval rates were very surprising. This prep school became just too small. Pizzagros would become a school and then a school network. In the 2000s, it would become higher education.
And then in 2007, the IPO, Croton, was born. The inspiration was the name of the town where Pitegris created his first school. What followed was intense growth that took Croton to the position of the most important education company in the world, adding value to thousands of students that can find an opportunity to change their futures and the future of their families, adding value to their communities, shareholders and over 30,000 associates growing, evolving, transforming. The Croton dream is now living a new chapter. It's a new era, a new dawn that creates space for a new company to emerge.
And by the way, not only one company, it's now time to become a holding company that can cover the whole gamut of our businesses and also enable new business models based on technology and digital. It's more than the right time. This is a great opportunity we have to seize. It's a new era for a new brand. Cognac comes from Cognition.
Cognition is a word that's to be found in Plato and Aristotle. The Greeks, of course, continued to shine that bright light and guide us through the path of enlightenment from cell to cell, from colors to colors and steady on this path that joins together what's rational and a perfect circular structure that creates humanization. And as such, we create a brand that's very strong and surprisingly simple and that represents our vocation to expand knowledge, cognate, transformative knowledge. So ladies and gentlemen, all of you are now aware of our new name. Cogniz is our new brand and we hope that this day will herald a time for as much value creation as we had in the last 10 years.
But we have a lot more to show to you. We would like to show you the other brands under Cognac. Croton is one of them. It's our B2C operation for post secondary. And now let's take a look at B2B for post secondary.
We won't have a video for that presentation, but at a time that is very remote, the Greeks opened up horizons, multiplied knowledge and created an echo for everything they knew, building the basis of education. They made wisdom more far reaching and they continue to inspire us. PLATO's ad serve platform. This is the B2B post secondary brand, Platos ad serve platform. This is what we want to become, a platform based on education and education services supported by technology.
So, Platos is our B2B post secondary platform. But there are more brands to unveil. Let's take a look now at our B2C K12 brand. This is a company that works directly with the end customers and more than a name, more than a verb, it's the action that breeds knowledge, simple, direct, human and very strong and symbolic. The circles represent humanization, plurality and connection because knowledge after all is an exchange.
Sabir is now taking on the B2C K-twelve position in our portfolio. So everything that relates to K-twelve management is under the Sabir brand. And we have more to show you our K-twelve B2B offering. And here we have a brand. I would like first to shed some light on the brand architecture we have.
We have here 2 brands for K-twelve, B2B, for the end customers, teachers, etcetera. So almost it's the relationship brand. But we believe that it was important also to have a corporate brand that could talk to the corporate environment, not under the SOMOS name. So with the intention of perhaps expanding our platform internationally, there is this opportunity we could use a new platform brand. And for this, we needed a corporate, a mother brand.
And this is the brand architecture. And we continue to be attached to this brand when talking to teachers and customers. So what is our B2B K-twelve brand? From what is very, very broad, from what covers everything without detecting barriers and without seeing any reasons to stop broad, grandiose and without limits, like knowledge should be. Vasta education.
So Vasta is the B2BK Higher Education brand and this is we also have the Venture Capital brand that will be launched in 2020. Cogna Ventures, So this is the final makeup. We have Cogna with Cogna Ventures as the venture company. Then we have Croton, B2C post secondary, Platos, B2B post secondary, B2C Sabeir for K-twelve and Vasta for B2B K-twelve. So starting on October 11, we'll have Cogne 3 and Cogne, we also have the B3 ticker and the ADRs.
So in October 11, we'll be trading shares under new tickers. This is the brand structure and we are very, very proud to be showing to you the new tickers, Cogn3 and Cogn NY. And Cogna is the new transformation of our brand. So let's continue. We think that the facilities in which we work are also key to our success.
So we have been talking about working environments. And let's take a look at what we have been planning for the new structure and what is the premise behind the new workplaces. We wanted at the same time to ensure that all of our Sao Paulo employees could enjoy the same premises, but with the preservation of individuality between the company. So we're bringing together the corporate offices, Tomos and Croton, and everyone will work in the same building. It's a building on Paulista Avenue.
We're taking 8 floors on this building. It's a highly digital building with interactive rooms, everything digital, but also guided by efficiency, which is of course our model at Croton. We wanted to send out this message that all of the transformation we are going through is not going to eliminate this law for austerity. So as you can see, even in the new building, we have the same occupation costs. So we have 8 floors.
This is the old Fanaque building, if you're familiar with the city. So we have the 2 first floors for the holding. Those are the floors that are the meeting point for all the rest. Then we have 3rd floor, plateaus 4th floor, Sabeir Vasta 5 and 6 and Croton on 11 and 12. So let's take a look at the new office.
The concept for the blueprint well, this is the 1st floor. It's a very interactive welcoming space. As you go in, there is an auditorium that will promote a possibility to interact with each other with games, with basketball hoop, so you can really enjoy the time you spend. And it's prepared for digital. We have, for example, rapid delivery train rooms, so that the agile technologies that are linked to business work perfectly in this building.
So this is the 3rd floor. So as you can see, we have the trains and the workstations, always flexible and autonomous, many of them with high tables, where you can sit and show what you're working on to your colleagues. We did a lot of research on the new setup and we're very happy to introduce this digital mindset to our working space. This is our canteen, our cafeteria. In each of the floors, we have a cafeteria like this one.
This is the delivery train station. This is the 2nd floor and the living together space. So what we want to give as a message to you is that we are investing because we want the company to be an eminently digital company and every detail matters. I think that the most important thing is really shaping a new mindset so that the people who work with us will realize that this is a new way of doing business for us. Everything we showed to you on the business opportunities and the focus on B2B show that we have shifted our mindset.
And now for us, it's really important to have an office that will echo the new changes into the digital space. It's very important also to have a team that's well aligned and that can get organized to deliver all the challenges on the challenges we have. So I would like to reinforce the existing structures and give you some information about the changes. Before we had 2 business units, post secondary and K-twelve, and now we have 4 companies, B2C, B2B for both higher education and K-twelve. So what's the new structure like and who is leading all of these areas and who in the holding is giving them support.
So of course, Cogna, this is the CEO And we have a managing director for each of the companies, Roberto Valerio is in B2C post secondary. He's of course challenges to grow, but also to generate cash in Croton. He will be talking more about this. On Platas, which is our B2B post secondary, we have Paulo Chetarsu as the CEO and he'll tell you how we did all the work in house and how by 2020 we'll have our launch into the international market. And in Saver, since we had to split Saver into B2C and B2B, Bill took over Vasta and Somos and we needed a brilliant manager to be part of our team.
So we went out to the market and recruited someone who had experienced similar challenges. And he was the manager of one of the largest K-twelve networks in Brazil, the Marista network and there he had the challenge of growing both organically and inorganically while ensuring quality education. So we Paulo Serino was invited and he will be taking over the B2C K-twelve Education Section as CEO, Paulo Cedino, we're very happy. We're sure that you're the right person to support us right now in this quest. And in Vasta, as I was saying, we have Mario Guillo.
He is CEO of K12. He will be the leader of this challenge of driving growth in Vasta along the years because we know there's huge potential for growth. So as I was saying, we want to create flexibility and give more autonomy to each of our business lines, but without losing track of our efficiency and operating excellence in the group. So that's why we are keeping all the units intact. So what are the new structures that we're using?
We have Jamil Marques, he is the Finance VP Julia Goncalvesis, VP of Product Management and Expansion Fabiola Cebre, VP of Human Resources and Corporate Operations Carlos Safini, VP of Technology and Digital Transformation Leonardo Lara, he is the Legal Director Gislaney Moreno, Institutional Relations Carlos Lanzar, he is Investor Relations Officer and the venture capital company that will create by 2020. So this is the team that will ensure that all of the deliverables will be secure in the coming years. And now we're moving on to the second phase of the presentation in which of the CEOs will talk about the specific challenges they face and also the great opportunities. So thank you all for your attention. I'll be back later on during the day to talk about governance and to talk about post secondary B2C.
With you, Paulo Valerio. Thank you. Thank you very much, Galindo. Can you hear me fine? I would like to start by saying that I'm feeling very excited with this new moment and now Cogna and Croton with post secondary education under my lead, we're feeling energized.
We see a lot of potential in the growth. This has changed not only the way we look at other businesses, but it also shaped how we view education in the B2C segment. And this is what I would like to explore with you right now. So what's the top question in everyone's mind considering all of this that Rodrigo has said? You might be wondering, is there still room to growth?
If we Brazilians in an economic crisis, is there really room to growth? Rodrigo said that we are the top player with BRL5 1,000,000,000 and less than 10% market share. So, Croton has a lot of room to grow, taking share of market in this business that we're very familiar with. And something that I like to say is when people ask me what's the latent demand, what's the potential market, I like these charts because if you consider that the latent demand includes everyone between 17 years old to 49 years old, Today, we have over 40,000,000 people in this age practice under a different analysis, and I can show you more about this, focusing on the delta between the students who enroll on in every year and the number of enrollments every year, there's always a delta between these numbers. And for 3 years in a row, this delta represented almost 3,000,000 people.
So if you add up the number of people who took the NAM exam, And there's no reason why you should take an NAM if you don't hope to go to college. And if we consider this and the number who joined higher education, the number is BRL18 1,000,000. And you might say, no, this is too much because there are people who are training. Okay, let's consider then, let's eliminate 30% of this number or even 50% more aggressively. Still, this means that 9,000,000 people in the market took the NAM exam thinking, okay, I want to go to college, but did not enroll in the end.
There are many reasons for this in my view, but one of them is their purchasing power, their economic health. When you consider, for example, the influence of GDP and the influence of unemployment in higher education growth, you see that there is a very strong correlation. If you discount the FIES years, you will see that the curves are very similar to the GDP variation curve. So this means that if we are on the verge of a new growth cycle in the economy, this will be a major catalyzing factor for our business. And we are deeply aware of this and that's why we pursue this strategy.
And I think it's very important to dispel this myth of there is no growth potential in higher education. The potential is there and it's very big. And it's also important to say that in Croton, we are coming to the close of a very relevant to the end of a very relevant student financing cycle. When you consider, for example, the evolution of FIES enrollments along the years, we see that starting in 20 ten-twenty 11, growth picked up. We had over 55,000 new enrollments in 2014.
And then there is a sharp drop. And here, it's very important to consider 2 factors. First of all, how Croton reacted to this situation and how we maintain a consistent level of enrollments. And I will also talk more about the impact this has on the number of graduations of students and the numbers in student cycle. So even with the reduction in 60% of new enrollments, we were able to maintain our enrollments year on year practically stable with slight influence on the 1st year.
So you can see that in our system within Croton, we saw almost 100% down. We had 8 10 enrollments. This represents minus 99% in comparison to the number of enrollments in 2014. And how did we do this? By replacing FIES students with out of pocket students.
And of course, FIES is very important in our student recruitment strategy, but the participation of out of pocket students shown in purple in the presentation is far more relevant than PEP. We grew 136 percent our out of pocket students. And if you observe the presentation and distribution between 'eighteen and 'nineteen, you see that the PEP part is becoming less and less relevant. And of course, this creates an impact on cash generation because the out of pocket shouldn't pay every month. And this is very much in line with what Rodrigo was discussing with you.
And following the same idea, Sofia has affected not only our enrollment curve, but also the profile in our student base. In 2014, 61% of our base came from FIES and this number is now reaching 18% in 2019. But what is relevant here is the out of pocket base, which grew from 39% to 82%. And when you consider the profile of students in terms of dropout rates, but specifically the number of FIES classes, and here you see the number of students graduating year on year, the change in this FIES cycle had an impact not only in student recruitment, but also created pressure on the number of graduations. So you can see that our student base shows a small reduction a long time, but it's important to observe that this cycle is ending.
It will end by 2020 with the graduation of all FIES students, this will create a much more homogeneous student base. And after this, we'll be able to pick up growth and really grow much faster if the economy is growing in tandem. So as I said, we have a very small market share. We can also tap into this latent demand of people that want to go to higher education, but didn't for some reasons, sometimes maybe because of money problems. But the potential is there.
And it's also we must consider the end of a very important economic cycle. And starting in 2021, we'll see a rebound, a very important recovery. And why do I think that? Because Croton is the company that's better poised in terms of management and efficiency. And we'll talk more about those pillars that show how resistant we are and how prepared we are to seize the benefits of this growth.
Even if the economy doesn't grow as much, we are certain that our student base will grow starting in 2020 for these reasons I'll show you next. It's impossible to grow your student base if your distribution network is restricted. We have the largest distribution network in the market. We have centers all over Brazil, but even more important than distribution is the quality and the precision in which we chose our locations. It's important to show you on this chart that we have we are distributed.
We are present in 19% of locations in Brazil. This is a sign of our efficiency. And we address 73% of all latent demand in Brazil. If you look at the table from the top 100 cities in Brazil in latent demand, we have 39 with a very strong presence, considering that many of them are greenfields, very recently launched. So, we are present, but we are not leaders yet.
We lead in 51 units in 51 of those locations, but not at all of them, because we are still growing. So I was talking about distribution. Quantity matters, but quality matters even more. We chose very wisely and proof of this is our greenfield program. It's very ambitious from 112 units.
We have now 176. So every 6 months, we have several units being launched and the penetration in latent demand went from 24%, then we now are at 34% coverage. And even more important, the distribution is quality. And this is information that will show you that the quality in choice of location and execution of the strategy was performed very well. And to give you a little color in this, our net revenue in this group of units is 7 percentage points higher than what we expected and our operating results is 12 percentage points higher what we had envisioned because we're very critical when developing our business plans.
But this shows that we really made some good choices. Moving on and talking about distribution, I think it's very important to say a few words about distance learning. We are market leaders. And as such, we have the responsibility of considering not only market share, but also revenue share. In this slide, you have an overview.
Even though we lost a bit of market share, our strategy was not to gain volume just for the sake of gaining volume. What we want, considering that you always have to transfer part of the revenue to the partners. What we want is to have top revenue and this is what we have been working towards. And our delta here of value is 8 percentage point in when you make the comparison between market revenue share. What really matters is revenue and also volume and ticket, average ticket.
This is a strategy we'll continue to pursue. And we're also going to continue investing in expansion. I've been talking about it for quite some time. We hope to reach 2,000 centers in Brazil. So there are still 500 to 600 to grow.
So I was talking about distribution, very good distribution, our preparation that will enable us to continue growing. And as you know, in Brazil, not all prospective students can pay or afford programs in all price points. Our broad portfolio, however, gives us more flexibility. In this table, we see the type of program and how the program is delivered. For example, pedagogy, it's a distance learning, but it could also be an on campus and distance learning and also only on campus.
If you look at this table, this is just to show you that we have a great deal of flexibility to allocate all of these programs in different distribution points. What does it mean? If you look at the matrix, you see that in cluster 1, we have, for example, 100% online and semi presential or once a week model. This is a model that's offered both in centers and in on campus. And examples of programs, we have pedagogy, etcetera.
And then we have cluster 2, which is a mix between on campus and also hybrid distance learning once a week. The average ticket is moderate, above cluster 1. It's offered both in Kempe and in centers. And we have as examples, business management, engineering programs, nursing and physical rehabilitation. And we also have cluster 3 with several on campus facilities and with an experience that is highly positioned.
Plus the 3, which is the on campus model, is offered only on campus. And here we see some of the examples. So how does this translate into real terms? This is an example of the business management program. As you can see, we have the same program with very high quality and the same characteristics of KLS 2.0, but created so as to ensure access to more students with pricing points that go from BRL189 to BRL749.
So, the more on campus, the more expensive and the less on campus, the cheaper. So all of this, of course, creates better access to students, but also maximizes the profitability of each program without losing volume of enrollments.
Now you have an example, engineering, EUR 529, EUR 649,000,000 in the Southeast and a bit more expansive on campus. This is how we distribute our programs. How does that influence our results? This is an example of one of our units. They offered only cluster 23 on campus programs.
But now we repositioned the prices. Looking at on campus, distance learning and the hybrid model were once a week model. This unit grew 13% after adjusting this portfolio. So this is a good example of initiatives we will continue to implement in each unit so we grow more. It is important to tell you that the more mature units, so the ones that existed before the greenfield project also has opportunities to grow.
We have 60 distance learning programs, 105 programs on campus. Not all of them are offered in all units. Less than 40 law, for example. Not all units provide engineering. Very few units provide odontology and even veterinary medicine.
So this chart shows our choices in a very simple view. I mean, if you look at social and applied science, basically business accounting is base 1 with a reference of LTV, then healthcare excluding medical, but other healthcare programs, engineering and law, they have a higher LTV, 1.7 times higher. And so that's the reason for our choices. Of the 4 46 programs we launched on campus, So, 4.46 programs on campus we launched in 2018. In 2019, 82% had this characteristic.
And let's remember that we do not have mature programs here. They have only just begun. And they have this characteristic. So as you can see, a big potential for growth. Now talking about our medical programs, the expansion of our medicine operations today, four units are offering this program.
1 is still not mature. We provide 346 annual vacancies, 2,000 seats and we are going to launch 3 more medical programs in Bacabao, CODO and PONTA PORA with 150 annual vacancies or 900 seats. And what do we expect? We believe this segment in our portfolio has a potential to grow 83% in student base, reaching about 3,000 students. And in revenue, the growth is more than 100% up until 2026 when the programs will mature.
It's important to remember these programs have a high demand, low dropout, a higher LTV, much higher than other programs. We've spoken about distribution. We've spoken about the products. But it's also important to make sure we have top academic quality. As Rodrigo mentioned, we are very happy with the results.
The results launched by the Ministry of Education last week, the highest growth I mean, if you look at the percentage of Ena dissatisfactory, we had an increase of 21.5 percentage points. It's a huge growth. We are very proud of this result. And let me highlight special information on Ayangueira. We increased our result by 21.5 percent, but Ayangueira had an increase of 30.1 percentage points.
So we had a different situation in 2014. So when you look at Enadi 15 and compare that to Enadi 2018, we can see this increase of 38%. So it shows the quality of KLS 2, 30 percentage points growth. And in other brands, many were already croton, we had an increase of almost 11%. So we're very proud of these results, not only in Adi, but also the performance of our R and D that's improved a lot.
So we have different products, a wide price range and proven top academic quality, which will certainly help us continue to grow in the future. But it's important as we talk about digital transformation, how has that affected us? When you look at our culture, something which has become known as traditional because we are no longer so open for a change, I think in Groton, this never happened. Our digital transformation, it has been so deep. It has also led to a cultural change.
We've repositioned our company. So we now think as if we were a start up. We put the student in the center. We use expressions such as product market feed. Let me understand what the student needs and then I will build my work model, considering aspects such as attractiveness of product.
So not only do we have an interesting academic model, but our prospects understand product differentials. They understand the difference between our product and that of the competition improvement. In the structure of Syllabus. We're launching 4 new programs in technology in 20.1, so adding to our portfolio. Now on quality, we are working on feedback, not only using Enade results, but also Connecta in our contacts with companies trying to understand how we can improve our product, in our engagement action at the units, improved management of classroom and virtual environment, solutions to reinforce content.
Today, because we use a lot of analytics, we can identify students that need more, that need more support. So we can be more accurate to meet student needs and who are the students who really need more support. Employability, this is something really interesting we've developed. Career trails and certifications, Some of these certifications bring big names of technology, employability skills and academic programs. Julia and her team, they always say it's not because the student studies nursing or physiotherapy that they should not use LinkedIn or buy digital media or know how to position on social media so that their business works more efficiently.
In addition, we work hard on engagement with active tutoring that has changed radically, using a lot of analytics to understand what students need. So we know who to talk, when to talk to students so as to ensure top quality, continuing evaluation, which I'm going to explain deeper in a few minutes and many other aspects that truly differentiate our product and our academic team that has really absorbed this new culture, the culture of start ups that has helped us transform our products to be increasingly more certain that the products are truly top notch. But students also need a good experience. I mean, not only do they consume our academic products, but they live in our Kempe, in our centers. So we're very happy looking at these metrics.
To give you some examples, we make comparisons, especially looking at the different cycles, enrollments and then exams, we compare year on year and we can see a clear evolution between January 'nineteen January 'eighteen and January 'nineteen, we improved our NPS by 14%. And between August 2018 August 2019, our NPS has improved 32% in our own units. And in 3rd party units, we had a 14% improvement. So we see a big evolution, not only year on year, but also intra year. Things are growing really fast.
And maybe you might be asking, but how can you do this so quickly? I mean, what is different about you? Well, of course, the digital transformation has truly accelerated this process as a big catalyst. But there are other aspects. Infrastructure, more than 440 construction works to renovate our Kempe.
And you can see a 35 percentage improvement in NPS, but the digital transformation is the number one driver. Continued evaluation. Our academic team has implemented this new evaluation model. As you know, academic was the best pillar of NPS, but they've improved 5 percentage points because the continued evaluation considers not only exams, but the whole learning process so that students truly know not only that they can do a good exam, a good test, but that they can show their knowledge. That's why I brought this example to you.
We migrated distance learning systems. Up until the midpoint of this year, we had Enno Par plus Allianguere, so 2 different systems. And we migrated the system. It's always a big risk to migrate. We always see problems.
But here, we practically had no noise. And now we have just a single system. And the result was immediate. In the following months, you can see an improved NPS by 30%. So digital transformation is truly helping us accelerate.
I spoke about distribution, product, academic quality, experience and how do we attract students. This is a competitive business. I could speak for a whole day about everything we do to attract and retain students. But our marketing and commercial structure focuses, I mean, it sounds like a cliche, but our commercial and marketing teams focus on adding value, not only growing enrollments, but growing quality enrollments to generate cash, to mitigate the dropout rate. And the team is very well structured.
The methodology is based on analytics. We try to use automated communication and customized communication. Of course, we invest a lot on digital marketing, pricing. Pricing and the active pricing is something we give a lot of attention to. We try to identify the best pricing point, considering our price and the purchasing power, Looking at the competition, actually going back to the revenue share chart, we follow competitors' prices every week for the last 3 years, we know the history of market pricing.
So we can adjust our pricing on the fly. Social media increasingly more regional, a portal to attract students that has improved the conversion rate by 30%, especially for 1st enrollments. This has been running for less than a year and it's also a result of the digital transformation process. I wanted to bring you just one example, so you understand how we do it. For those of you who know this market, this is an example of an AB test.
So we had a certain policy. So say, we had a certain number of scholarships, we tested 3 simultaneous offering. The first one had a very good conversion rate, almost 5% more, but the discount was higher than the control group. So the result was 1.8 percentage points better than the control group. So if it were only because of enrollment conversion, we would choose offering 1, but we finally chose offering 2 because it had a smaller conversion rate, but also a smaller discount.
So you have the results 3 percentage points better than the control group. So this is something we do every day to maximize our results. Another important topic, now that we're speaking about our strengths, especially because of the opportunities we see ahead of us. I've spoken about operating efficiency. I'm not going to use a lot of time to talk about this, but it's important to remember, we keep the same rigorous execution based on the value chain, identifying processes, what do we have to do.
We put it in the operation map. We know what has to be done by whom and when. If classes begin February 4, what has to happen before that. We measure all of that using KPIs. So we know if it's working well.
The 4 pillars, financial operations, commercial and academic, all of this in matrix. So we can compare the units in the same cluster, generating a Mondrian chart. Mondrian, yes, similar to Mondrian, the artist. So we can identify the gaps, the opportunities, how we can improve the performance and how do we take best practices to be shared in other units. We do that using our monthly radar, so our execution is increasingly better, always focusing on cost management, especially in our units.
You know that we have our master plans to reduce physical space or when we have a change in the profile of students, all of that will continue. We will continue to do increasingly more. I'd like to end this conversation about operating and I had to give you some examples of how the digital transformation is accelerating the delivery of new tools and functionalities. We have agile teams using the agile methodology. We have 16 value streams, 63 agile teams, more than 6 50 people involved.
But I think the most impressive thing to show you are these almost one 1,000 features delivered. In less than a year, we've been working on this new model. Some are only just details, other generate great transformation, but the speed of implementation is truly impressive. Look at some examples in the student admission journey, we have new enrollment portal, new corporate portal, evolution of the CRM platform. In terms of financial and administration, we have new payment means, self help portal for students.
Until last year, less than 7% of all requests were solved by self help. Now more than 90%, which reduces cost for us. It improves efficiency. It improves NPS. Other industries have done that in the past and we're now doing that in an accelerated way.
Now robots for tutoring, adaptive learning for all programs, we've expanded that. Crowdsourcing for Connecta, the number of vacancies in Connecta, the number of seats in Connecta is growing. And we are working always based on data, based on analytics. If you don't have a good database, how can you make decisions? So we have evolved a lot on this front.
And in closing, I think I've spoken a lot about our strengths. So I think something that Rodrigo mentioned is the positive trend in cash conversion. This positive trend comes from 3 main pillars. The first, grainfields. Greenfields initially consumed cash because we needed to make relevant investment.
Also, the operations have been profitable from day 0, but this is now in the best. As of 2020, we will begin to have increasingly better operating results, so positive results. Investment to build greenfields, most of it is now in the past. So the CapEx will have a downward trend in the future. So these operations will generate increasingly more cash as of 2020.
The second big pillar is our own operation. We have less need to use CapEx in our units because our units are mature already. So we now invest only in the programs themselves. We need less working capital. We're consuming less working capital.
And the 3rd pillar, PEP, I'd like to give you some more color on PEP so you understand that a little bit better. The first important information that we have fewer PEP students now in the new enrollments. That started in 2017. The reduction was 30%. Now in 2019, 11%.
So the drop was 20% in 2 years. It means we have fewer PAB students and more out of pocket students. So the cash generation has grown. This is good news. And the second piece of information is that even among PEP students in our student base today, their profile is more PEP 50 that is they finance less.
So they help us more in terms of cash generation. And we now see greater receipts of installment payments. In 2019, we began to see that. And in 2020, it's going to be a lot more. So it's important to see these positive trend in cash generation or cash conversion.
Now bringing it all together, today we have a low market share, as Rodrigo mentioned, less than 10%. Today, we see that as a huge potential for growth. The demand is there. Otherwise, why would people take B and M? I mean, they only take B and M because they want to go to higher education.
So there will be a moment when they will enroll and we're ready to welcome them. We're ending the cycle of post secondary financing model, the FIES that had a big impact in 2015. And now the cycle is coming to an end. It will end in 2021. So we will begin to grow.
Again, I mean, if we have economic growth, then we will grow our student base and we're ready. We have all the pillars to sustain growth and to tap the opportunities, especially now with the digital transformation and we have bright prospects to increase cash conversion because of greenfields operations in PeP. So we're ready for growth. As Rodrigo mentioned, we are ready to face the challenge with our new brand, Cogna. So one more time, thank you.
Thank you, Rodrigo, for the opportunity to lead this great team. Let me now give the floor. I mean, we're now going to talk about PLATOS, our big sister platform. Let me invite my colleague, Paolo de Tarsu, CEO of PLATOS. Hello.
Hello, good afternoon. First, it's a big joy to be here with you today. And different from Humberto, my presentation will be more conceptual, more than looking at results because of all companies I will that will be described here today, PLATOS is the youngest. I mean, in the last 2 years, we've piloted this concept that led us to PLATOS. And I hope I'll be able to show you everything that is behind the setting up of this new company.
And from now on, please view Krotum not as a pipeline business. And what do I mean by pipeline business? Now we want to think about the company as a big platform generating different business opportunities. So other businesses, I mean, not exactly what you control, other businesses may also generate good results. So to tell the story, I'd like to go back to 2017.
In 2017, during the early stages of our digital transformation and strategic planning, we created an internal project named Discovery. Discovery was set up because we could see that the graduate program market was very big and our market share was very small. So as we looked more carefully at this market share, we realized we had strength to be stronger on this market, but we had to make a few changes. And so within the digital transformation process, we began to use some of the principles of this different mindset. One of them was to give more freedom to our teams.
And what do I mean by that? Well, now we don't really have a logic of micromanagement and controls and we now look at big goals. So the team receives 1 a big goal and the team will then be oriented to delivering that goal, not really how it had to be delivered, actually because nobody really had an answer on how it would be delivered. So it was important for the teams to have this freedom. The other principle was everything we did, we had to use technology to support the solutions that we wanted to develop.
And so then we made a daring decision, which was to build practically from Greenfield a new platform. A new platform which was for us to reach the graduate program market. And
we also wanted to be very disciplined. Everything in this platform was based on a logic in understanding our customers from certification to everything. And another thing we wanted to look at, we wanted to look at Croton B2C as a client. So, the mindset was not really based on pipeline management. And this is important because our assets, our higher education assets are managed by Roberto, the over 1400 units and centers, the brands of the different institutions.
And even accreditation is under BTC Croton. So, to be successful, we need to address this challenge based on a service provider logic. But this was back in 2017. And from then on, just to make a very long short a long story short, we have been reaping excellent results. I think it's important to mention that one of our expectations was to increase our student recruitment, our enrollment numbers and results have surprised us for the better.
From 2018 in the comparison with 'seventeen, there was growth of 30% in the number of new enrollments. This year, we're growing 50% in new enrollments. When you consider revenue, our growth has exceeded 30% in the comparison 2018, 2019 and also 20%. And when you look at yield and productivity, our growth was very expressive with levels above 30%. And even more importantly, when we started asking our students, how do you like this experience?
Is the product we're delivering to you in this graduate platform, is it something that's valuing adding value to you? Our NPS increased over 40 points. And depending on the segmentation, it can reach up to 50 points plus. So all of this led us to believe that we were on the right path. And what we were doing was provide service to over 200 colleges with this graduate program.
So, we decided to make an experiment with this new way of working also in the graduate programs. And this also awakened us to other questions. We started considering other trends and we tried to size the opportunities ahead of us. And speaking of trends, when you consider higher education, whether graduate or undergraduate, we can be totally certain that DL is a reality. We have based on the last census, we've had 50% DL new students versus on campus.
And if you look only to graduation DL or rather undergraduate, this is no different when you consider, for example, a graduate program. So, when you just consider the distance learning part, we see that growth is even faster. And this lead us to 2 issues. First of all, we know that Diao is here to stay and increasingly even when we see more institutions joining this competition, This is a model that's been validated by the market. This idea that it was a 2nd best option is no longer the case.
Additionally, when you look to on campus, overall institutions are under a lot of pressure to deliver growth only on campus. So this is one of the first findings we have. A second finding has to do with the size of the market and everything we can do to become more successful in it. In those two charts, I show the difference between the numbers and the numbers between left and right. Based on this platform model in which you're providing service to a higher education institution, On the left, if 60% of this market was served by a third party under a revenue sharing logic and here we adopted 60% revenue sharing and I'll explain why.
This means that we would be talking about a business representing BRL34 1,000,000,000 in market size. And when you look to the graph on the right, this is another picture. When you consider the public that can be in undergraduate and graduate programs for example. And so in the first part, all of those that have secondary education complete and we see that the total addressable market is over BRL300 1,000,000,000. And why is this so important?
It's important so that we know if it's a lagoon or an ocean rather than saying that this is the definitive market or the definitive market size in this universe. So, here we see the difference between the two numbers and we see of course it's a very large market, the potential market. Another question we were asking ourselves, once the distance learning segment has growing is in a growing trend and the market potential is so big, there should be more institutions offering graduate and undergraduate programs, Diel. And what we see in the last census is that from the 2,300 private institutions, not all of them are accredited for distance learning. This means that we have over 2,000 higher education institutions in Brazil that have not been accredited yet to offer either undergraduate or graduate programs in the distance learning mode.
This is important because when you do an analysis state by state or location by location, we see that the undergraduate on campus student numbers have been declining and the base of DL students is growing and a large part of the students in those regions are studying in institutions that are not in their own state. They are not really many times they are not really using the institution that has the reputation that could attract the students. Why? Because we have players with a nationwide presence that is more expressive than their statewide. So we believe that this is something that we'll see growth.
Certainly, not institutions will go into this market, but there are many more that we'll be offering either undergraduate or graduate programs in the DL mode. Of course, this is a very CapEx intensive game that requires a great deal of expertise. And you cannot really step in without very extensive preparation. And based on this opportunity, we created Platos. It's a net serve platform that was created to give support to other higher education institutions.
Whether those opportunities are linked to efficiencies that can be obtained or to help those institutions enter this market of undergraduate and graduate DL. So we created this platform considering Fortuna as a group with over 200 higher education schools, maintaining this service provision mindset and looking to the trends that we detected in the market. But we ask ourselves, is this an existing market, a market that makes sense or are we creating something that's really new? In our understanding, this is a very small market, something that has just starting. And however, internationally, it's an existing market and a market that grows at very substantial rates.
This model is known as OPM. Overseas, it means online program management. Those are companies that were born with a mindset of helping traditional higher education institutions that had only on campus offerings to go into DL with undergraduate and graduate programs. And this is a mature market internationally, especially in the United States. This slide shows some of the types of OPM models we have.
If you look to the bottom of the chart, we have some OPMs that were born within universities. First of all, they created internal solutions that would permit these companies to work on the 2 markets. And then they went out to the market trying to find more clients. And on the upper part of the slides, we see some pure OPM companies that were born either as startups or companies to address the same opportunities I was describing. There are many possibilities, of course, some of them some of the OPMs focus on health, others in management.
But the fact is that the market is out there. It was estimated as a market of BRL3 1,000,000,000 with growth rates of 20% a year, CAGR. And we believe that it will continue to grow, especially in Asia and in Latin America, there are some case studies and players that are developing their offers for Latin America. So what about plateaus? What are the services we want to offer?
In summary, we have 11 services that we would like to provide. And we also classified those services in 5 dimensions. 1 of the dimensions is based on technology solutions, which means academic ERP, MLS, CMS and also finance ERP. Those were solutions that we had to build from scratch so that we could offer this to Croton's institutions. Then we have a second block related to the back office, whether academic or operations.
Then service to institutions, content production, management of tutors and teachers. And the most important block for us, the value proposition for us in the go to market, which is support to the institutions that are not yet in DL so that can generate new revenue that is skilling them up so that they can offer DL programs. If I could say, for example, 80% of our energy at Platos have to do with this top line perspective, the top line of our clients. We also will provide additionally regulatory advisory services. In the holding, we can create cooperation agreements with institutions that are not ready yet.
And with this, in parallel, they can file their accreditation requests. And also, the cherry on top is increasing their employability track record. We know that we will be successful only if we have a win win proposition for both. It has to be good for the institutions and also for the students that are enrolled in them. So, our value proposition is very clear.
To be good for everybody else, first of all, it has to be good for the students. So this is what we want to do in our OPM. But what do we or what have we already been doing? In the last two and a half years, we've been working to address all of those dimensions, especially in graduate programs, the L4, Croton. We work in all of those dimensions.
Can I say they are 100% ready? No, I can't, because we're still evolving, we're still growing and we will have to learn and improve as we go. But there are some improvements in the sense that in all of those dimensions, we have at least one solution that has already been developed. And when we incorporated Somos, we brought on board a B2B unit they had and that is now part of the Platus platform. In this case, we are working in 3 of the 11 dimensions.
We have 40 agreements with higher education institutions in Brazil. Those institutions have 20,000 students using our products. And the name of the game for those 40 institutions is academic quality and regulatory advisory services. And our top brand has been Sarajevo Educacao. It's a very traditional brand with a strong reputation.
And we see that clients that have been using those products are very loyal. The opportunity we have here is an upselling opportunity. Those are clients that are already with us, but we can tap into other needs, supporting them with the initial offering of TL graduate or undergraduate program because this is what will create a top line generation opportunity for them. Okay. Now let's take a little perspective on the wave that started in 2017.
We defined that we would be using this model in house. We defined the 40 institutions. Our results were substantial and gave us the confidence to take an additional step forward. So 20% top line and 34% is the estimate for this year in the comparison with the previous year. And in the following years, our mission is, first of all, to continue to provide services for Croton in its own project with strong focus on graduate programs, but also increasing the emphasis on the development of programs and contracts with other higher education institutions so that they can really move into digital and DL.
This is our vision for the future. The platform will continue to evolve and grow, But our driver from now on is to look for clients outside of the Croton ecosystem. We won't lose track of our current clients, but we'll keep an eye open for the new opportunities. And I think that the 5 key messages just to close my presentation are higher education continues to be one of the top investments for those who want to be socially mobile. And when you compare, for example, somebody who the salaries of someone who has just secondary education and those who went to college, the salaries are very different.
And this is even more evident with graduate programs. And it's not easy to move into distance learning. This is something that requires a great deal of expertise and knowledge, and we want to use all the knowledge we have available at Croton to help our clients take this step. For the clients' institutions, we see a very important opportunity to create new revenue streams since, of course, we know that there are many challenges involved in terms of growth, but we have developed our track record has been proven in the last 2 years and a half when we look to the benefits and results. And what we want is to become a single partner, a one stop shop to help the institutions using all of the assets that we have in house in the holding.
And we also want to become a partner to support institutions, capture potential and capture revenue they are not currently capturing. This is our vision at the Plateaus. Thank you very much. Thank you very much, Paulo. Thank you very much, Roberto and Rodrigo.
You're now all invited to join us for our coffee break. We have 25 minutes and then we'll resume with the second part of the meeting.
Now let's begin. The second part of our meeting. I'd like to invite up stage, Paulo Sidino, our newest member in the executive team. He will lead this presentation. Thank you, Paolo.
Thank you. So now the idea is for us to use 30 minutes to talk about SABIR. Our proposals, we will be looking at our history, how SABR was set up. And I'd like to start showing you this slide. Rodrigo mentioned this, a little bit of our history that led us to Cogna.
We've announced today our focus on quality and efficiency, which is something we brought also to SABR to build the future of this company. So this was our strategic planning. In 2018, SABIR was set up the acquisition of Leonardo da Vinci and Vittoria, after that the acquisition of Lotto Sens in Manaus and Rio Branco and a greenfield operation in Manaus of Lato Senso School. So then a big opportunity came up, which was the acquisition of Somos, which helped us accelerate this process in a very favorable manner. Before the strategic planning, we had 8 units in 8 different cities of 3 Brazilian states, a school in Belorizonte and schools we had under contract with a few companies.
And then we created Sabir. We acquired these two brands we've mentioned. And then we came to 14 units in 11 cities of 6 states. And SOMOS brought many more units, 39 units in 17 Cities of 9 States. And what is really important, if we look at the map, we now have a much better coverage with very little overlapping of operations as we brought Sabir on board.
Today, our combination of valuable assets is well distributed in different regions under these brands. And as we look into the future, we want to further improve operating excellence. We'll be integrating these assets and we will be growing our margin to reach a higher level so that we can also have an expansion via greenfield projects in the future. So for 2019, we've maintained the same margin approximately. And we started a process focused on operating excellence to improve this indicator.
Based on our proven execution capacity at Cogner, we brought together these 4 pieces: academic quality, brand reputation, a strong commercial team and operating excellence. I will be explaining each one of them. So academic quality is a key element for schools to be successful. We took a few actions. Some have been implemented.
Other are ongoing efforts. So we now have the Olympics and international admission to expose our students to a possibility of participating in Olympics, mathematics, physics. So that is a new opportunity for our students. And we already have results, a number of gold, silver and bronze medals. Now we've had more than 50 approvals in international universities, including names such as Harvard.
A and Teachers Training is another key element. We now have a pedagogical unit focused on teachers training. We've invested a high number of hours in teachers' training so that the professionals of all brands and all marketplaces have a standard education. And then we've always had a very good performance in the A and M exam, which brings good visibility to us. But now we also want to work with Visa for School so that we can compare our results internationally.
We're now introducing looking at the different phases of K-twelve, because NAM is only in the end of K-twelve. So now we're monitoring the performance of our students in different moments of their K-twelve education. And last, but certainly not less important, we have projects on social and emotional skills, working together with our educational staff. Brand reputation. All our brands have a leading position in their markets, and the markets where they operate.
And this is important because it brings more brand awareness and so we can use this plant Strong commercial teams or strong commercial efforts. I believe this is a key element and one of the big changes we've been able to implement this year. We'll split that into 4 key topics: the new go to market, technology, customer experience and the new products included in our offering. Now the new go to market ensures excellence through processes for student intake and student retention. We invest in online and offline media and a whole set to delight our prospects and students, focusing on media investment also and with a full calendar of events.
We need a lot of discipline for the execution in this process. This has been Technology. All our platform is now integrated. So we have CRM. And based on the CRM, we can work on analytic data.
Today, we already have information in real time to make decisions. Customer experience. At the center, we have the students and their families. And all around these students and families, we monitor trying to delight these families and students in every point of contact, be that online or when they come and visit our facilities. So we anonymously, we can measure the efficiency of these processes in our units, focusing on improved service to have their engagement in the process and working with analytics so as to prevent dropouts.
New products. Now this is a very good opportunity as we talk about additional or complementary solutions for K-twelve. So you have more traditional activities such as sports, dance, arts, martial arts. But we are still not using all of this potential. So in terms of revenue, I mean, for the next year, we want to double the share of these complementary solutions in K-twelve units, working in a network approach and also adding more innovative activities.
So bringing to the school the responsibility to implement these new programs together with Vasta Education. Most of the products you see here in innovative activities will be provided in partnership with Vasta. Operating excellence. Some actions have already been implemented. So here you have a view of the platforms in our units.
This year, we had the migration of the platforms. The process will end in 2020, because after the acquisitions, different groups of schools had their own platform. But now we're all migrating into the same platform so that we will have online data and also we'll be able to bring the expertise we've accumulated to all of our units so as to improve efficiency. Now strategic sourcing, this is one of Cogniz's fields of expertise. We've mapped 34 categories already.
For example, we talk about facilities and utilities. Well, if you have a large base, you can centralize negotiations and therefore obtain savings. Other solutions, each school independently buys energy from the local provider. But if we can centralize this negotiation, we buy energy from the free market. So we will have more predictable prices and we will also obtain savings.
Having said this, now how do we see the future of SABER? Phase 1, we will optimize the current platform. Where do we stand now in this process? 4 steps. We've taken 2.5, let's say.
So we have the assets, high quality and reputation academic assets and an integrated operation, which we are about to conclude. Up until the end of 2020, it will be ready. After that, we will improve our performance levels, not only operating performance, but also academic performance. And after that, we'll grow the operation organically. The second phase would be our expansion via acquisitions and new greenfields.
The first thing to do is to understand the magnitude or the size of the market. Rodrigo said we have a bit more than 1% as we compare our revenue to the market size. But here again, I believe we can grow this value providing complementary services, which have not yet been fully mapped. Growth potential here is clearly huge. Now, this is a highly fragmented market.
Here, you see the number of students. If you look at the 5 largest players, they have less than 10% of the market, including a few consolidated players. And the prices are not the highest. I mean, so when we look at the share of market value, this is even smaller. So the market is highly fragmented, which reminds us of the higher education consolidation process that started in Brazil a few years ago.
So how do we want to grow? Let me remind you that K-twelve education has unique aspects and characteristics. The cycle is longer if you compare that to higher education. The ticket is usually higher. And there is more customer loyalty.
I mean, you're talking about 95% loyalty levels. But because it is a longer cycle, it is more difficult. I mean, you have to be careful when you want to change elements in the process because of its long cycle. But we have a very interesting history if you look at our acquisitions. All the brands that are now under the umbrella of SABR beginning in 2011 with BH and then, well, also with Greenfields under these brands.
So this is the idea, really. I mean, we want to use the awareness of these brands in the markets where they operate to help us grow and expand in these areas. However, in order to do that, we must have excellent operations first. Now wrapping up. This is our B2C view for K-twelve, focus on K-twelve according to our strategic planning.
Growth was accelerated by the acquisition of Somos. And if we have an accelerated growth, we will have more opportunities, but of course, a lot of work to do. So that's why we need focus in operating excellence. The market is highly fragmented and it has a huge growth potential. If we can optimize our performance, then we will be ready to grow via greenfields and acquisitions.
So this is what we had to say about B2C K-twelve. This is the script we plan to follow as we make adjustments when the challenges become closer. Now especially regarding brands, because we have different brands operating in different locations, so integration has to be careful. I will now start talking about B2G, which is the National Textbook Program. These are the cycles we have every year with the acquisition of textbooks by the government to be distributed in state owned schools.
Now we have to understand this cycle, especially if we want to compare one year to the other because here the cycles are 3 year cycles. Today, the government purchases the 3 phases of K-twelve, elementary 1, elementary 2 and high school. And so as of 2023, we expect to have a new cycle of purchase and then you have repurchase. So part of the material is used, but part of it is lost. And so 20% or 25% is repurchased every year.
Now, if we look at the cycles, then we see elementary school 1, elementary school 2 or primary and middle school. And high school, you have some differences that can be seen on the chart. Now, if you compare that to SOMOS '15 and 'eighteen, this is the market share. We lost 1 percentage point. Then in middle school or elementary school 2, we always say that the government buys text books every 3 years, but the process begins 1 year before.
So they launch and request for proposals. They open up a tender process. Companies present their proposal. So but this cycle, I mean, we did not work on it from the beginning. And so we had a loss of market share, especially because we had fewer books registered and so fewer books were approved.
In the future, we want to go back to the historical market share under Sabir and always thinking about the text book program for 2021 in high school and more investment in titles of books so that we can have more books approved. So it is a significant opportunity to increase revenue. It's not included here because there are changes depending on the cycle. I mean, the revenue you obtain from elementary is not the same as the revenue you may obtain from high school textbooks. If you look at middle school today, our share, I mean, it would be something roundabout BRL150,000,000 to BRL200,000,000.
And the final result will be known only in October 2020. So this is what we had to say about SABER. Let me now invite Mario Guillo, now in charge of Vasta Educasto.
Good afternoon, everyone. 2nd attempt for a little more enthusiasm. It's a great honor for me to be here in the last meeting, the first Cogno meeting, in fact. To have all of our colleagues here to discuss the future of the company is very exciting. I would like to thank you all for being here and also thank those who are following us from a distance via the Internet.
I thank also Carlos Lazar. He gave me a T shirt, a jersey. I had to dye it for 2 months to be able to wear it. Here for you. So speaking about Vast, Rodrigo defined it very clearly in the introduction.
It's a company 100% dedicated to B2B Private Business. Our reason of being is to provide 3rd party companies, 3rd party educational institution with services. The Sonos acquisition was a milestone. It really made us step up in our development as a company. However, this was not an opportunistic acquisition.
We went through a very thorough strategic development program and we evaluated in almost what elements were already present in the company that would help us expedite our goal of being a one stop shop partner for our clients. So in addition to the elements we see in the mandala, we see that many of them are already present at SOMO. So it was a very transformative acquisition for us. This mandala was also shown by Rodrigo in the introduction. In gray, we see all of the activities schools need to implement in order to provide better education.
And then we have the core activities. So first of all, having core content, having skills development, social, emotional skill developments and also STEM disciplines is something essential and sometimes STEM is also associated with the arts. This is also very important for the company. Digital learning, continuous teacher training. All of those aspects are important for the core activities of a school.
And then we have other activities that are more of a supporting nation. And Brazilian schools need a lot of support in both dimensions, both in the ad tech platform dimension and in the digital services platform and the ad serve platforms of Platos, as we have seen earlier today. And nothing will work properly. Even if you have the entire ecosystem ready, nothing will work unless you are fairly organized in your approach to the market in terms of how to communicate your message to the schools and also how to create loyalty among your clients. And from the external perspective, when we were considering the acquisition of SOMOS, what we saw is that for investors, SOMOS was a company that was difficult to understand because they had the K-twelve market, they had their own schools, the text book program market, all with different cycles and with different revenue potential.
And this differentiation between Saver, which manages our own schools and B2C and with the textbook program, which is the only one in which we operate together with the government, creates the SOMOS platform for the Brazilian market. So the current SOMOS is now a much easier to understand company. We are 100% content digital services for Brazilian private schools. The separation of Sabiren Somos also helped to communicate this concept more clearly. And without an integrated sales team, many times you approach the market in a haphazard way.
It's the salesman who tried to sell books. It's another salesman that tries to sell the educational platforms and a third one that sold the English as a second language books. And for the clients, what they realize is that maybe the selling approach is not as well integrated with Somos. So here we have a single specific sales force, a single service department under the same objectives and align with our goals as a company. And I will show you this later on during the presentation.
Another important point is that we don't have all of the dots covered here. Some of us had it. That's why they were so important for us, but something we don't have yet. STEM, we don't have programs on robotics. We don't have coding programs.
And Gio, how are you going to complement this platform then you might ask? Well, either we're going to develop those programs or through exclusive partnerships with the top providers of solutions of this sort and also with the support of our sales force and our maintenance forces. So the approach is either through partnerships or through acquisitions so that we can really have the full mandala on offer. Another thing I wanted to say to you, have you ever heard that, sorry, well, if you were to fall asleep in the 19th century and if you were to wake up now in a hospital, you wouldn't even know where you are, if it's a company or a hospital. But the only place where you would know where you are is in a school.
And why? Because schools didn't get all the support or didn't command much interest in society to really introduce many changes, unlike hospitals, for example. Teachers, for example, in the last century lacked the support of science and technology. And this was different, for example, in the case of doctors. Our ambition is to be the pillar and the support for teachers so that we can bring schools into the 21st century.
We want to ease the transition, ease the digital transformation of schools. Rodrigo started to say in this conference that everything starts with a change in mindset, not even with introduction of new technologies. I don't really want to spend much time on this slide. And by the way, you can download the presentation later from our website. But take a look at this.
This is very interesting. Let's consider, for example, the manager, one of our stakeholders. The manager talks to many different people because he talks to different solution providers. This, of course, creates a certain waste of time and mostly they act as firemen just putting out fires. This is what I used to do when I worked in schools, you run from fire to fire.
But take a look at the data on analog schools, and those of course are the schools we know as schools today. No data or data that's dispersed as a result of this. All decisions are based in perceptions rather than facts. It's guesswork. I think that student X is not really paying attention to the lessons or that he has problems at home or maybe the parents are not happy with the school.
It's guesswork most of the time and this is how you manage schools. In the digital schools, what we want is to maximize the productivity of managers, considering not only the excess of information that managers are subject to, the manager should have a clear view of the problems that he should address now and how to address them. Like this, they will be able to lead the school and serve as motivation for all involved, whether students, teachers or even parents. This is the type of transformation we want to drive in schools, either through our core activities and or through our support activities, as you'll see in the next slides. So we acquired Somos.
We integrated Somos in order to have a platform to help schools. But it's not only a platform. It's a platform as a service. What really defines business as a service are 6 characteristics, and you'll find all of them in our platform. Subscription based model, the LTV of an agreement is something that's very well known.
Our clients sign for a term of 3 years with us or even 7 years. So the lifetime value of the agreement is very well known. And we have low acquisition costs for our clients. As a result of this, the CAC, which is one of the best known indicators, is pretty high. And based on technology with recurring revenue, which is one of the features of subscription of the subscription model, highly scalable.
It's not an issue for us to work with 200 or 1000 schools, asset light with low CapEx and expressive growth rates. I'm not really sure if Rodrigo has mentioned this, but at the end of November, we hope to have the guidance of revenue of our platform as a service, that is Somos, for the year 2020. We'll be doing this at the end of November because this is the period in which our contract cycle for the next year finishes at. So we have now closed September. Half of the agreements or 1 year agreements are closed by September and the other half between October November based on our experience.
So we have now closed the first half of our year with very good, very positive numbers. We have surpassed our goals in this initial cycle at a level that's far superior than the previous year. And we have now started the second phase with a lot of energy, with a lot of drive, and I believe that the growth we'll deliver is going to be very good. But at the appropriate time in November, we'll communicate this to the market and also we'll tell you how this revenue will be appropriated from the 2020 agreements, how much derives from the Q4, Q2. This is what we call the ACV bookings in the financial lingo.
So this is platform as a service, as I was saying, and I would like to show you now the huge potential for growth we have. We compete in a vast market with conditions that are highly favorable for our success, as you will see in the coming slides. First of all, let's consider some of the social aspects behind our success. Well, the first thing you have to do to drive digital transformation is understanding your customers. That's why the 4 first items refer to households in Brazil.
So what do households in Brazil, Brazilian families expect to be a tailwind in our platform. First of all, 80% of the families consider education as the best investment they can make. This is no hearsay. This is no opinion. These are facts we extracted from surveys.
80% of the Brazilian families believe that education, quality education is the best investment they can make. Secondly, the demand for private K 12 is on the rise because the investment in basic education should provide access to good higher education institutions. And an interesting phenomenon that Paolo has mentioned, even with opportunities for higher education overseas, we see many Brazilian students applying for foreign universities and taking SAT exams. And then another important change is that students, they go to school for longer periods. The families cannot really move around the city to pick them up.
So the more they stay at school, the better. So this idea of extracurricular activities outside of the school, like churro or English as a second language, this is now under extension in the large metropolitan areas at least. So before, during my time, schools were the hub of education. And now they will become the holistic education hub for our children. And this is very important, of course, because we also have a complementary offering in education.
Paolo has been talking about our own schools in Sabre. And he mentioned this fact. Families want schools to be a beacon for the moral and ethical competence as well. Teaching our students the 21st century skills as well. And what is that?
It's a skill set that have to be developed by the schools. But Quio, you might ask, isn't it part of the national curriculum? Some of the competencies, yes, just 10 competencies, in fact. The simpler competencies are now considered an obligation of schools during regular study hours, but there are several others that have to be offered additionally by the schools from the 5 top priorities of families, 3 of them that is 60% of those priorities are social and emotional skills. And what about the school's point of view?
Well, there are 2 growing trends. Schools feel that they are institutions that have to gain more sophistication. In average, the Brazilian school is a family owned enterprise in which the founders continue to be involved in management and usually without succession or successors. It's not uncommon to it's in fact rare to find those the sons or children of the founders of schools who want to continue to lead the family business. And that's what creates such a need for technology to reduce costs, to optimize time, to transform data into quality information.
So those are the social aspects and considerations, but they are all tailwinds for our platform. Now what about the hard data? Well, I would like to go back to a discussion we've had several times in our Investor Relations meetings. They say, Gil, you're investing in K-twelve and families have fewer and fewer children. This is a statement that holds true if you consider the average numbers.
But for my specific audience, it's not really the case. It's true that families in Brazil have fewer children, but the families who have fewer children are the families in classes D and E who send their children to the public schools. So in the great majority, those are families with children going to the public schools. And in the left, you can see in dark gray the drop in enrollments in public schools from 2010 to 2018 according to INAP Census. Brazilian schools, public schools, lost 4,500,000 students.
And in the same period, and going against general opinion, enrollments in private schools grew by 10%. So the demographics is not against us, in fact, quite the contrary. Another important point, we have to think of the composition of Brazilian society, with a small part of the growth of the private network came from the migration from public schools to private schools. Is that a trend that will hold in the future? If we believe that Plasas DNA will continue to send their children to public schools when there is growth in C, B and A classes, this will be a tailwind for private schools.
Okay, Nod if you agree with me. Okay? If you're embarrassed, just give me a sign with your eyebrows. So by 2017, this is a phenomenon that has been measured. This is data from the Brazilian Census Bureau, IBG.
2017 is a past number closed and measured. So we start with the composition of the Brazilian society in which 50% of the population is in Clasest DNA. And now we have just 25% in 2017 in those same bracket. So half of the families went to C. D and E.
So in 2017, we see the Class C in purple together with B and A represent 75% of Brazilians. If we are to trust the Census Bureau, they may make 1 or 2 minor mistakes, but overall they are pretty on spot. We'll have 50% of Brazilians in Class B, half of Brazilians will be in Class B, 10% of Brazilians will be in Class A. So just considering Class B and A, we'll have 60% of all Brazilians. This is very favorable for Brazilian private schools.
They are families that will have their children going to private schools, and that will put a lot of pressure on those schools. They want good English lessons. They want very good development of social emotional skills, other programs such as robotics and computational thinking. So in addition to those tailwinds I have mentioned, we have both qualitative and quantitative factors benefiting us. And as a result of this, this is the current market, not projections.
We believe that our total addressable market on the right is BRL25.2 billion a year. Half of this total lies in content and ad tech activities and the other half comes from the digital services that schools need. And allow me please to give you a little more flavor on both. Let's start talking about core education. For us, core education has to do with core content.
The content well, if you're not part of this environment, well, the content a school chooses can be compared to the software of a computer, right? Facilities, etcetera, is the hardware, but the software is the content that they deliver. And this is what we call the core content, in fact. So together with digital learning, which is something we put together, it really makes no sense to talk about analog content, digital content, all experiences have elements of both. And teachers are our partners in delivering methodologies, learning methodologies.
So we believe that we have the right to win and to be a great partner for schools in Brazil. Why? Because we respect their options. Our company was set up in such a way that the owner of the school or the decision making body of schools is not forced to adopt something that they don't like or they don't want. If they want to use learning systems, that's great.
We have 6 brands of learning systems operating with different methodologies and different price points. So they have plenty of choices. Now, if they prefer to use textbooks, we also have the 4 most important publishing houses in Brazil. They can use those books on a pick and choose basis. We're not considering that they are using our books, the spot schools that are almost under extinction or they can use the textbooks with a new innovation that we call par, which is what?
It's an abbreviation of partnership. The school chooses the book they want and we set up a learning system based on books for that specific school. So from the teacher's point of view, this is very comfortable because first the teacher chooses the content and then we make it more systematic. With the learning systems, the choice is already made for them. So whether in textbooks or learning systems, the schools have choices.
We can also have a hybrid package being offered to those schools that you'll see in the next slide. A very fair share of Brazilian students still use textbooks and with PAR they continue to use textbooks, but it's a a more systematic approach with subscription model behind it. And the model the business model is subscription based. So we believe that we have a chance of winning this fight for three reasons. First of all, we respect the school's choices.
We are the only company that's able to use textbooks and learning systems to schools. And in the chart on the right, we see that half of Brazilian students in numbers of enrollments use textbooks. And a little more than that, light gray shows textbooks and dark gray shows learning systems, 55%. And many of those students go to the very same schools. It's very common that a school chooses, for example, for elementary school, they prefer the textbooks.
And for the older students up to high school, they prefer learning systems, and we are the best player in the market for them. Why? Because we can offer everything in integration for them. On the left, we see a remarkable finding, T1 to T4. This is a decreasing city size.
So T4 are smaller cities and T1 are huge cities. In darker gray, we have learning systems, pure learning systems. Observe please how it starts gaining relevance as the size of the city decreases. And what's the opposite? We see textbooks being used in a mixed way and as shown in light gray.
And finally, in black, just textbooks, which is what? Which is something that's used generally in large schools, in large cities. And here, the share of the pool is very relevant. And we are able to win this game because of our diversity in portfolio and also in terms of our experience, the experience we provide. It's a highly digital experience.
We are no longer here to discuss whether the textbook will be replaced by technology or the other way around. For us, this is a senseless discussion. Technology has a different vocation than textbooks and both are important in an education system.
Actually, students sometimes don't want to bring printed materials to school. Well, there's no difference for us. I brought a screen of, pull it out. All of our materials can be used on a tablet, on a notebook, I mean any device because it's responsive. So students can use it in any device.
But the most important here is customer experience. Now here we have 2 quotes by students. One of them speaks about chemistry, which was what I thought. But anyway, he said video resolution of Pleural Chemistry. Thank you.
You're top. So that's an Anglo student. Plurau, I love you. I just completed my homework in a pizzeria. That is, he has all the content, all the exercises, adaptive learning, telling him you're good at this, do you want to go deeper, you can improve in that, Can you recover what you didn't learn?
Do you want to watch a video of the exercise you answered wrong? Well, you showed the video you didn't understand? Call a tutor using your mobile phone. We have tutors available for our students from Monday to Saturday from 7 a. M.
To 11 p. M. Even on Sundays from 7 a. M. To 1 p.
M. Even on Sundays from 7 a. M. To 1 p. M.
So in everything our students do, we measure. But as we can write nice reports for parents, for teachers, like we say to a teacher. Most of your students went wrong in that exercise. So what you should do in the next class is to go back, go back to that exercise because it is of no use to continue because many of them were wrong in that exercise. Or we will say, oh, your students did it right.
And we also have these lovely things. When a student calls to say he can do his homework eating pizza, perhaps having pizza with his family was not so fun, right? So then he decided to do homework while his family ate pizza. But I mean, we offer education anywhere. So the NPS is above 70%.
I mean, that's a very excellent NPS. Schools that really value the experience we promote via plural. So we can be a very relevant player because we respect the school's option and the students' option because the experience we provide is really good and because we have unquestionable academic outcomes. Beginning from the right hand side, in 504 cities, our partner schools, not our own units, Our partner schools, schools we serve, they are the best option that families have in that region, in that community. So a large number of partner schools rank 1st in NEM.
And they are leaders very far from the 2nd place. Our students from high school, they can go to any university they want, federal schools, ITA, UHSPISO access to the best universities is part of the reality of our students. Even international, we had dozens of students only last year coming from our ecosystem, our 4,000 partner schools that are now studying in Ivy League schools, such as Yale and Stanford and many other universities. We also have the most renowned brand. We have the highest brand awareness in the market.
The second competitor is quite close to us, but the third one is really far. And all of this is measured by hard data. Our quality actually comes from our tradition, one of our brands, Anglo. And I wanted to show it because next year, Anglo is going to be 70 years old. That is 7 decades of excellent education.
And another brand we share with Paolo di Tarsu in the B2B of Higher Education, Sarajeva. Sarajeva is 106 years, is a company that has existed for 106 years, actually has received renowned awards, JABOUTI. We have 2 we have twice as many JABOUTI awards or other awards than the second competitors. So our reputation, our experience, the fact that we're highly respected are key elements for us to be leaders. Now talking about complementary education, we already have 2 stars in our mandala, so Languages and Social Emotional Programs.
Languages, let's be very honest, 98%, 95%, 90 some percent is English. Brazil consumes very little foreign languages except for English. So when we say languages, we mean English. And the social emotional content, we provide complementary solutions. 0.5% is our market penetration with our English Language Materials and the leader in me, the Uli Deringmin, the 1st social emotional program.
Now the leader has the largest social emotional program in Brazil and we have only 0.5 percent, 0.0 percent penetration. Well, we still need more. Yes, of course, STEM, academic activities. The other day, somebody asked, but Guilla, what is academic activity and complementary education? Because academic, it's the syllabus, the basic content.
Now what we call academic activity is for the student to choose what he wants to study. So we're now launching for next year Plurao Olimpico for the Olympics. So let's say a student wants to be trained to participate in the mathematics Olympics. Well, he wants to prepare for mathematics. So he will study that.
Somebody else wants to study astronomy to prepare for the astronomy Olympics. So we have a lot of room for growth. Now regarding digital services, we have just one. We're now working to include the other pink balloons here, but we already provide the e commerce content. Because of fiscal or tax issues, it's increasingly more difficult for schools to buy text book and resell them to students because schools are not allowed to sell product.
They cannot buy and sell. The schools have to provide services. They cannot really sell product. So there is a number of schools that come to us and say, Somos, can you sell the books directly to our households? I mean, because it's difficult for me to collect the money, it's difficult for me to manage credit.
In addition, I don't even have a license to sell books. So can you not sell the books to our students? And the answer is yes. We now have the e commerce. We actually acquired an e commerce operation.
It's called Livrofacio. It is very interesting operation. We already have 432 partner schools, 106,000 students served by our Livro Facio. And last year, we sold 167,000 different items or SKUs. And e commerce is only the 1st digital service we're providing with a market penetration of 0 0.5% and the market potential is BRL13 1,000,000,000.
The other services will be developed, academic RP, financial RP. We're looking at different options if we're going to buy, if we're going to develop, if we're going to have a partnership to offer these services, if we're going to use our own sales force. But we see lots of opportunities to grow. My expectation was to convince you that we are a relevant player. We have an incredible portfolio.
We have complementary products. We're focused on digital. But what I really want to tell you is that we want to educate better. Our purpose is to educate better. And every day we work and go to work at SOMOS because we believe in innovation, because we believe that education can be improved.
We have very interesting partnerships that I'd like to mention. 1 is this company named Brainco. Brainco came from Harvard's Innovation Lab together with the MIT Media Lab and brainco manufactures this piece of equipment. It's called a headband. So you put it on, you look handsome, just as I do now.
And this is doing a complete exam, a complete electroencephalogram in my mind, in my brain. So we know if the student is paying attention, if the student is connected to class. If I had given it had been to you as you came in, oh, you would discover that I'm not really thinking, I'm not really paying attention. So that's something important we can discover. I mean, had I known if all my students are barred, then what would I do?
I would change. I would change my class. As a teacher. I can change the student experience when I know they are not really paying attention. Same thing about studying.
I mean, we've all heard there are students that have a deficit of attention or hyperactivity, but Brazil prescribes 6 times more hitalina or the medicine, the continued use medicine than France. Is it because Brazilians are in Brazilians are 6 times have 6 times more difficulty to concentrate than the French boys. No, that's not possible. So this headband is measuring 12 brain parameters. Focus and attention are just 2.
We can actually identify when the student is doing homework, if the brain waves are related to depression, for example, after a certain threshold, I mean, then we have to activate our protection network. We must protect the student, call the coordinator, tell the teacher, tell the family. So this is just an example of things we are currently developing so that teachers in Brazil today have the possibility to also be part of the 21st century. What is NAZA doing here? Well, the algorithm we use in these headbands was developed by NASA.
So now that we have this partnership with Brainco, we can exchange information with Harvard, the MIT, NASA. So this project, the headbands will begin in October. We've conducted some tests in October at Anglo. So in 18 months, using a headband to study will be just as ordinary as it is for us to use a watch to know the time. Now the other interesting partnership I'd like to mention, I only have half a minute to finish my presentation, Carlos.
Can I have a couple of minutes? Just a couple of minutes. Now our Cogna day happened 1 week before we signed this partnership. The partnership will be signed next week in Rio, SOMOS will be part of the National Network of Scientists for Education, just like Haitong Senna Institute. We will be the only educational company that will have all this hub of Brazilian scientists who are working to improve education.
And all of this innovation will be available to our teachers and our students through our products and services. That's why SOMOS now has a new logo. But this logo reflects an internal change. Together, we changed the logo. This is our new SOMOS logo.
We're now a company of science and learning. Everything we do is for us to learn how to teach better. That's why we say science and learning. But nothing will be a success. The company will not grow revenue if we do not conquer new partners and if we do not take very good care of our current partners.
So that's why we have the largest sales force. And they're not only sales force, they also provide pedagogical support. I mean, if we visit about 1,000 schools a day in Brazil, partner schools or sometimes we have retention and loyalty events. And if they're not partners, then we talk about our products and services. So we focus on building the right incentives, the right compensation to our sales force and training, so that we can truly deliver growth.
And we will announce this officially in November. But now we'd like to invite you all to participate in this virtuous cycle. You know part of this game. I mean, you've seen many brands that had good academic results and they gained a very good reputation. So they would have more students, more client schools.
But this is not we don't want to stop here because we are science and learning. Of course, we want to have more students because we want to have big data, cognitive big data so as to measure things which are not obvious for teachers. So big data and our data scientists can classify, can group our students and tell them the best activities for them to study that will engage them the most, the ones that are more adequate for that student so that everyone will learn better. And if everyone learns better, the academic result improves, the reputation improves, we have more big data and that's how we build this virtuous cycle. Our purpose, the reason why we exist can be communicated by this virtuous cycle.
That is why our logo now shows these virtuous cycles. In closing, I'd like to say that we are ready for growth. We can increase our penetration base of partner schools. We have a large number of projects and services to include in our Mandala for development or partnerships as the one I mentioned with Brainco and also acquisitions. And we believe that schools are always schools.
In developing and developed nations, they all need to go through the digital transformation. So SOMOS will begin this journey in Brazil and maybe in the future, why not international expansion. So thank you all very much for listening to me. And I'll now give the floor back to Rodrigo Galindo. So now the 4 companies under Cogno, we've spoken about them.
We've spoken about administrative change, brand architecture, the physical structure. We talked about the companies. And now we will have a 15 minute presentation, the last presentation to talk about our new governance. Now a new company requires different skills and complementary skills to the ones we had before. You know that our Board of Directors at Krotum today includes people that have dedicated their whole lives to education.
So we have 100 of years dedicated to education in our Board of Directors. These were the companies that truly set up today's Croton, the founders of Pitagoras, the founders of La Yan Guerra, the founders of UNI, other independent members in our Board of so that our governance could truly add to help us address the new challenges. So at the end of the day, we will be we will show the new proposal to elect our new Board of Directors, and we will tell you what these changes are all about. Now this is the structure. You now know it and we now propose to have a new Board of Directors with 3 new members, each one with a different challenge, each one with a different proposal to contribute something new to the board.
The first goal we wanted to attain was to bring the Board closer to the managers that is closer to day to day operations. For this reason, I was invited to participate in the Board. So I would be one of the 3 new members of the board with this task. So I will now accumulate my functions as CEO and also a member of the Board. So this is the first change and the first innovation in our Board that we will be proposing in the shareholders' assembly.
But we have 2 other changes, 2 new Board members. The first one is one of the greatest references in strategy and innovation in Brazil with experience in boards of large corporations in different markets. Juliana Rosenbaum, I think you know her from other boards. She's a member of the board in large Corporations, Duratex, Raynor, Susano in the Strategy Committee. She was a member of the Board at Arezzo.
She's a very active Board member. She knows a lot about strategy, innovation, retail and she will contribute a lot in our Board. And the second name is one of the leaders of Brazil's digital transformation with a proven track record of deliveries and a disruptive market vision. CEO of 1 of the largest digital companies in Brazil, Thiago Piao CEO of Stone, which is now a new member of our board, if this proposal is to be approved by the General Assembly. So we will maintain educational skills.
Some of our board members actually came from the world of education. They have dedicated their lives to education, but we now have also a few new members. This is the proposed Board of Directors. Ivan de Nava, Luis Antonio de Moraes, already an independent member of Alfredo dos Marez Guia Nicolas Shakur, also an independent member of the Board Rodrigo Galindo to bring the Board closer to managers Juliana Rosenbaum, a new independent Board member and Thiago Piau, also an independent new Board member. With that, we believe we are structuring a board that can protect our knowledge on education, also add new skills and maintain the necessary proximity between the board and managers.
But we did not want to lose the knowledge and the skills of the members of our board, the current members of our board. So in our new governance structure, we have an advisory board, the Board of Founders, who will prepare demands and will suggest topics for the Board of Directors to decide. I believe having a Board of Founders will help us retain the skills and competencies of the original founders and will also allow us to add new competencies. So this would be the Board of Founders, the 5 founders, Altamiro Galindo Vandroneva, Gabriel Mario Rodriguez, Giulio Tabizuka and Vofredo Dos Marios Guilla. So we were able to bring together the best from what we had and also bringing new skills.
This is our new governance structure, 7 directors in the Board, plus 5 members in the Board of Founders, in addition to the strategic committee, Strategy and Innovation, People and Governance, Finance and M and A, Audit and Risks. So these are the messages on governance. And in closing, I'd like to wrap up this meeting, putting together all the pieces of this puzzle. So I think we have 6 very relevant takeaways. I mean, if you want to bring home a message, these are the key messages.
The first piece of our puzzle today is basically this. We are reinventing ourselves to continue growing. We've had good results, but we realized we had to reinvent ourselves to continue growing, and we've done so. This is the first takeaway. The second, we must change our mindset to be able to create new opportunities in the expansion of K-twelve and in our entry in B2B for higher education as well as K-twelve.
So we have PLATOS working in the ad serve platform for higher education and VASTAN, SOMOS working in our K-twelve platform, B2B. So we changed our mindset to continue growing and generating opportunities in new segments. The 3rd takeaway we'd like to leave with you is that with that, we've considerably increased our potential market from BRL 55,000,000,000, which was only B2C and Higher Education to BRL 174,000,000,000 that is the billion. That is the addressable market has almost tripled, whereby we've increased our potential market. The 4th takeaway is that we now have a new structure to capture every opportunity.
Not only do we have the opportunities, but we're ready to capture them. We've announced today this new structure, this new business structure with a holding company and 4 companies underneath to tap every opportunity. And the 5th opportunity the 5th takeaway, we now present a new governance model to support this new phase, greater integration between the board and managers, new members of the board bringing new skills, 57% independent board members and 4 advisory committees plus our advisory board or Board of the founders. This is prepared team to build our new chapter, a team of leaders, 4 business unit leaders and for vice presidents to be able to capture all the opportunities. These are the 6 takeaways.
I think that it's I mean, our way towards the future is very clear. And today, with this Croton Day, we're not talking about an event. We're talking about the future. We're talking about our next 10 or 20 years. We have giant opportunities to continue to grow in time and we are aware of these opportunities and ready to capture them.
With that, I wish to thank you all for being with us this afternoon, tell you how happy we feel in view of the opportunities we have to capture ahead of us and we will be working hard to tap these opportunities, doing what we know how to do. Our purpose, which is to transform the country through education. Thank you all for being with us and good afternoon. Now let's begin the Q and A. We will set up the stage for the questions and answers.
Panel. I'd like to invite our leaders to come up stage, please. So there's Carlos Safini, our VP of Innovation and Digital Transformation Jamil Marquez, our CFO Pablo Lacerda, our VP on People and Corporate Operations, Gislain Moreno, our Institutional Relations Director, Julia from Academic ERP, and she does a few other things as well. Please take a seat. Now let me ask you, if you have a question, please tell us your name and the organization you represent.
And if possible, please try to be limited to 2 questions and tell us who you address your question to. We have 2 people here, one more, a few more on the other side. We can begin here.
Thank you very much for your presentation. Could we talk a little more about Platos? What's going to be the dynamic of Platos? You're using internal know how to foster competition for yourself. There are some how are you going to provide intelligence?
How are you going to break up the market to avoid competition with yourselves? Yes, this is the first question that comes to mind. Susana Itau, my name. I think that the answer resides in segmentation. We'll have a hybrid of a hybrid package of offerings.
And the concrete offering, which is to support companies going into the DL market, I think it's important to mention that this will require trial and error, of course. But it's important that we focus on the institutions that don't focus on the same type of audience. So I believe those are institutions with a slightly higher ticket, who don't have a DL offering, but whose time to market is compatible with our offering. Our hypothesis is that only parts of the services will be really meeting the needs. We have 40 companies, 4 institutions using our services and they want efficiency based and higher quality products than what we're offering today.
So we have many solutions for content, regulatory advisory services and then the bottom part as well. So the strategy will focus on this. But in a one off basis, depending on the geography where these potential clients operates, we might have an institution that has a positioning that's more similar to Croton's, but may be operating in a region where Croton does not have a strong presence. As such, competition will not be a problem. We know that we'll have a very clear Chinese wall period.
Institutions need to be totally confident that no information will be exchanged between Platos and Croton. The success of this project depends on it. So I think it's going to be a mix, but along the lines I have just described, in fact. Just a follow-up. You said it was a hypothesis, this explanation you just gave us.
But then let's imagine, okay, you signed a lot of agreements with other companies that are in competitors. Are you going to revoke the agreements? What are you going to do? I think it's a little early to try to predict what will happen. Currently, we have agreements with institutions that want efficiency and operating efficiency.
So in a case like this, it's very unlikely that we'll run into conflicts. As for the institutions that will follow the Platus to Crofton model, the criteria will be focusing not only on agreement. Those are institutions that have to attract a different type of student, not the same as Croton. So in this case, it's unlikely we'll run into conflicts. But the contract model will follow the best practices we see in other markets, longer term agreements based on revenue sharing because to go into the DL market, well, it's very complicated.
Roberto knows this. It requires a lot of investments in systemic platforms, content production centers. So that it really makes sense for Platos and the institution to enter into an agreement. We need long term agreement where the success will be shared. My second question is to Guil about the training for the sales reps.
You trained your sales force in a very short period, and they're performing extremely well. So could you please tell us about the incentives, because you're selling to the right people, it seems. Well, first of all, we had to focus on the training of the sales force because we have a very seasonable business. So, we just couldn't afford to leave training for the second half of the year. It was a very important initiative, so that we wanted that the sales force be integrated as of April 1, and that they would be trained to sell the entire platform.
So we put together a team with the best textbook salesman and learning systems salesman. And then we said, okay, you're just promoting our integrated platform now. And we know that there are some Brazilian schools that prefer to maintain a superficial relationship with us. They'll choose 1 or 2 textbooks, what we call the spot market, not on a long term, not on a subscription. And our sales reps get just very little for this type of agreement.
And since after they start working with our books, then they might want to sign a longer term agreement. The upsell in this case is better compensated for the sales reps and they shift from the spot book to a learning system, then they're going to get fully compensated for the core content. And they can also get some because of their other potential partners, because of the Libero Facil platform. So whenever they visit a school, also thanks to our market intelligence, we have a very strong market intelligence team supporting us. We know how predisposed the school is to continue using spot textbooks or whether to migrate to par or learning systems and what other products we can market to them.
And all of this creates the compensation package. What we want is to be a high growth subscription model with a lot of cross sell tech based company, because this is what adds value also to our sales team. Good afternoon from Bank of America. Well, last year, you talked about the Alight School project. And what you showed us today is a little different.
Do you continue following the Elites School concept? Well, I think there was a change only in name. 1 year ago, we had clarity on the route we should follow. But after 1 year of study and visits to the schools, what we observe is that Allied School today is a school using a subscription model that starts using our products from textbook to ad serve. And what we used to call the Alight School is a company using our financial and academic ERPs that uses our student acquisition model using Liberfacio and also our core content.
This is what creates an allied school for us. They have great LTD for us, both in terms of ticket and also in terms of duration. Yes, can I add something? Of course, boss, you can always add something. I think that this is also representative of the mindset transformation.
A few some time ago when we were working on the strategic planning, one of the things we discussed is that digital transformation assumes that you're open for learning, learning at every interaction and to change direction if needed. And I think that this is also a sign of how our mindset changed. So the direction in that project was right. We wanted to be the one stop provider for those schools. And in our dealings with them, we realized what services made sense for them to receive and others that made sense for us to deliver.
For example, BPO, we saw that the complexity in BPO was very high. The services were not scalable. And what we needed was processes that could be run. So the Alight School concept was right, but now we built a subscription model based on the concept of Alight School, but making adjustment in the services. The services that really make sense for us is what we include.
So maybe in 1 year's time, we'll be showing you a different mandala to you next year because we'll find several of the things that needs to be provided and that we will be able to provide at scale and under the subscription model, things that we are not aware right now about. Okay. And what about Jean Mio, what about cash flow? You showed us in the slide 3 top contributors. And what will be their respective contributions once the business is more mature?
How do you view the potential for conversion of EBITDA into cash flow? Thank you very much for the question. In relation to the three parameters Roberto mentioned, we are not disclosing the figures yet. We're still developing the budget for next year. We know that PP will have higher collection, higher revenue because of the maturing of the schools.
So we'll have twice as much cash than in the previous year. There's a headwind and offset that comes from Fies with that's grossing less, but we also have the working capital coming from out of pocket that favor us. And finally, greenfield. The greenfield is something that has been using up working capital and but we don't see it using up working capital anymore, but more on a neutral position. And conversion depends on the working capital movement, whether we'll have payment plans and how many of them.
But we believe that everything is converging to the levels we had before 2014. Marcelo Sanchez from JPMorgan. I have two questions, please. The first one for Paulo Ditazio. Could you please comment on internationalization?
You mentioned a potential for it. And secondly, in TL, is there an opportunity to offering of offering the 20% of DL that schools can have. So in addition to pure DL, could we have schools introducing this into their portfolio via your offerings? And also in relation to the targets for the 4 company business heads, what do they have to pursue in the coming years? Well, in relation to the 20%, the answer is yes.
We see this as an opportunity for plateaus. When we started discussing the different service choices for institutions, one of the first opportunities we mapped was this one. But when we were estimating the total potential for this market, we came to the conclusion that there's room for us to help several institutions seek more efficiency, but the market is not as big as the other addressable markets we have seen today. When I make the comparison, the go to market proposition is less attractive. It's better to help the companies increase their revenues.
But since this is an asset that we have in house and that we can bundle in our service proposition, we believe that this will be a revenue stream for PLATO. And since everything is so new, what we want is that PLATO generates new revenue for our clients. This is our mantra, but it doesn't mean we'll restrict ourselves to that. We believe there is there are other opportunities, but this could be the initial relationship we maintain with institutions. And internally, we have been talking about the future avenues for growth in this business.
And Platos has very good conditions to go into foreign markets. I think that it could get more traction, for example, in Latin America, Peru, Colombia and Mexico. I think there's traction for plateau there, especially when you consider the part of the mandala that doesn't have to do specifically with content, because this could be another challenge. But we've been talking to other solution providers similar to Platos in Latin America. But our focus is elsewhere.
We want to seek growth in the medium and long term, concentrating our efforts in Brazil. We'll, of course, if something else presents itself as an opportunity, it's great, but it's not our focus. Well, going back to the KPIs when we were talking about the keywords, when we're talking about the assets of each company, I think that in post secondary education, we want growth, but not the high growth that we'll have in the platform. So for example, it's high growth with cash increase. So 2020 is going to be the last year, which will have a loss of students coming from the FIES graduations.
And starting in 2020, we'll see opportunities for growing our student base appearing once again, because of yes, students have graduated. So the key word for higher education is cash generation. It doesn't mean we'll just forget about all other indicators, but cash flow generation will be the most relevant one. As for the 2 B2B platforms, Platos and Vasta Somos, we have the classic subscription model indicators, CAC, and we'll try to track our growth and compare it to how much we can grow. If you consider a more mature company with a B2B platform in K-twelve.
We cannot really disclose the numbers, but the LTV over CEC is extremely high. The lifetime value is much higher than the acquisition cost. It means we can invest more in client acquisition to drive our growth. But we have seen a very high CEC with very high margins. If you take, for example, technology companies with high growth, they have they invest a lot in acquisition costs, reduce LTV over CEC and reduce margins.
We have a lot of factor burn in our margins to continue growing. So this is an ideal company that has all of those conditions and the ability to continue growing. So this type of indicators, cost of acquisition, lifetime value and lifetime value over acquisition costs and growth will be the indicators for platforms. As for the more mature of them, past and so on, they have the challenge of generating cash. What we won't have is a company that lacks cash generation a cash generation perspective.
A company such as plateau. Plateaus can neutralize margins, but they need to have very concrete cash generation potential. We're not going to invest in technology companies just to have a high growth company without any cash generation perspectives. And even in a technology segment, we want to see the growth perspective very clearly. Now in B2C, it's all about the operational excellence indicators.
So EBITDA, cash generation has to grow. And after we go up in the level, if we for example, we started with the suboptimal platform, we are not going to burn capital to just expand our suboptimal platform. First of all, we're going to optimize the platform and then we can grow via greenfields and acquisitions. So, in broad lines, those are the challenges and the indicators we'll be tracking.
Samuel Alves from BTG. Question goes to Rodrigo. In your final slides, you spoke about the new business structure. That was one of the pieces in the puzzle. I'd like to ask you about the funding strategy for these business units.
I mean, with the new business structure, do you think if that could evolve into a new ownership structure, perhaps? Let me give you an example. If PLATO's I mean, if Vasta needs more capital to address growth opportunities, could we see a situation when these companies would be capitalized? And I mean and just for us to understand, if Cogna becomes I mean, at the end of the day, becomes a holding that may be the owner of different listed companies, I mean, in a comparison with the Cozan Group or GSL and Logistics. Well, some time ago, we announced a relevant fact when we said this, that we're open to all strategic opportunities that can add value to the organization.
So the answer is yes, it may happen. Now if, when, if it's going to be VC or private equity, then we don't know. And when we have to inform, we will inform clearly to all stakeholders. But yes, we may look at this structure as a structure that can allow for companies to follow a different path eventually. But we will be publishing the results of these companies separately as of the Q1 of 2020.
Why is that? Because if we want the market to be able to evaluate Croton by the sum of the parts of its 4 companies, we have to provide information for the market to do this analysis. So we will be publishing the results separately. So in the future, each company may also stand on its own feet and follow a separate path. Now question to Paulo.
Also during your presentation, who Paulo Soudeno, if you could talk about the opportunity of acquisitions inorganic growth as of 2020? In the last call, you informed that next year, you will accelerate your agenda to acquire schools. What is your strategy? More marketplaces, new marketplaces, places where you already have operations, a bit of each? And what about the integration of these schools?
If the integration of these schools is something that will be easier than the integration of the whole network today. Yes. Well, I will answer and I will ask my colleagues to add. I think Rodrigo clearly said that we have a lot of homework to do in terms of improving operating efficiency. This is key.
Now while we cannot implement this, and I think it is perfectly feasible to implement that next year, But it doesn't make sense to grow via acquisitions. I mean, because we now have a suboptimal platform, it doesn't add value to multiply that. So I think this is one of the things. Now after we deliver that, then the way, I mean, we can continue to develop these regional relevant brands and then conduct acquisitions around these brands and then continue to use these brands. And going back to what Guido said, the fact is that in K-twelve, we have a number of very well consolidated brands and there is no succession.
So that generates opportunities for acquisition. And so this can be one path of growth. And also in marketplaces where we're not present, we showed a map here and we could see we're not really present in Parana, Hip Grand Dusu, so that may also happen. Now, Paulo, we don't want to have a date to begin acquisitions or the implementation of greenfields. But there is a trigger.
What's the trigger? Well, when we feel the platform is optimum, it doesn't mean the margin also platform is up and running smoothly and the capture of benefits, we still have a gap. So maybe the EBITDA margin will not be the best or the expected EBITDA margin, but we know that all the measures to get there have been taken. So the platform is running well. We just have to wait because time will bring the expected results.
So what's the trigger? Well, when the platform is running smoothly, then we can continue to buy, although we will continue to work to improve margin after that. Here on the left, Joseph Tepermann from Eniti. Question to Paulo Di Tarsu and Mario on PLATO's and Vasta. It seems to me that the schools that apply your model will have will become the gap between these schools that implement your model and state owned schools will be even bigger.
The gap today is already big. I'm sorry, Kepler is your name? Joseph, Joseph Teperman. Listen, Joseph, when we mapped the market, I mean, the first approach, we looked at the market as a whole, including state owned schools, the public system, because we can see that this government, especially in higher education, they want the schools to be self financed, that is to pay for their own bills. But we don't know how long that will take.
So we have a few signs that it may happen eventually. But if that happens, we will pay a lot of attention. I feel happy if that happens because again, PLATO's model begins from the B2B2C mindset. It's not pure B2B. I mean, we want to help schools work better with their students.
It's not that we just want to sign a contract and then it's up to the school. And for that to be successful, we believe in strong brands. And it is a fact that public universities or state owned universities have very strong brands in Brazil. Then they have a potential that is much bigger than the number of students they have today. So if that should happen, we are paying a lot of attention and we've had some previous conversations on how we could tap that market.
But in practice, we're not looking at this market directly because we still don't know whether this will be possible or not. So on PLATO's, the focus is still the private market and of course paying attention to what the government is doing with state owned universities. They have very strong brands, as I mentioned, but we have to wait and see what will happen. Now, Joseph, my answer will be very similar to Paulo's, because government activity at Cogna is under Sabre. Vasta is 100% dedicated to the private market of B2B, B2B2C based on our private market e commerce service.
But we believe there is a lot of room for social responsibility helping state owned schools. There's a lot of technology we have in SOMOS and maybe we could use Pitagoras Foundation or SOMOS Institute to support also state owned schools. And so far, we've done this at no cost. So for ABNCC, the national curriculum that we developed as part of our services for the private market, we gave it to the state owned schools. That was a present to public schools.
So we understand we view this as corporate responsibility. But at Vasta, we're still not thinking about revenue from the public sector. Hello. This is Roberto from Bradesco BBI. I have two questions.
I think they go to Guido. First, about growth, the ACV. Do you think this will be more based on the market of learning systems that will grow, so growing that 55% market share? Or do you think you will steal share from other learning systems? And how much do you think this market of learning systems can grow compared to text book?
And the second question, if you are going I mean, what is same store growth? What is growth in partner schools, where you already have Croton books and they're now adopting learning systems? And what are truly new Kraton customers that is new schools that are subscribing now schools that had no relationship with Kraton or Vasta. Nice questions. So what have we seen on the field?
Learning systems already have a high penetration, more than half of Brazilian students. So the conversion rate is from text book to learning systems and especially to the innovation, which is to the Apar system. And this is clear for us. And we believe it is healthy because we convert a model of adoption into a model of sales that has a very low CAC. And we expect that in the future, learning systems will not increase their penetration compared to today.
And the fact is that we have good players that are stealing students from other players, but we still have a lot of conversion from the adoption model to the subscription model, especially at Parr. We've seen that Parr can actually steal students from other learning systems. And so there are learning systems that are perhaps weaker and the school says, well, this Parr model makes a lot of sense to me. So the school would migrate. I believe PAR can help us balance this game between textbook and learning systems.
And the second question is in relation to the LTV on CAC. I mean, if you have a conversion of a school that is a spot and it becomes a learning system school, it's the cost to obtain this customer is lower, so the LTV would be higher. We still have not made a decision on what the breakdown level will be for ACV, but I think the general concept is enough for us to model and then say everything that is subscription, what is BLTV on top of CAC? And what do we want to do in terms of cross sell or up sell? Maybe the first time we still don't meet all the expectations, but we will be improving.
We'll be looking at your feedback and then we will improve. Thank you. Well, I think we have another question in the back row. Good afternoon. Irma Cartze, the Goldman Sachs.
Still about the first question that was asked, how you are going to avoid possible conflicts of interest in K-twelve between B2B and B2C? And also if you could perhaps elaborate a bit more on processes, processes and what business model, but if you studied to model the processes that you will be adopting to avoid these conflicts of interest. And also the criteria that you use to decide where it makes sense to invest your own capital and where the platform is the best solution. I mean, the question is about K-twelve. Yes, it's on K-twelve.
Well, there I mean, I really wanted to answer when she asked if we see a conflict of interest when we have our own schools and third party schools. Look, the largest K-twelve companies have already made a decision, which is to share their expertise, to share their know hows with the competition. If I may, I mean, Pitarogoras that was founded in Belo Horizonte, we have another school and we have one school in Belo Horizonte and we have 78 partner schools that use the same pitagora solutions. And so this paradigm has been consolidated many years ago. It's the same thing about Positivo, the same thing about Anglo.
I mean, it's not so difficult to break this barrier. On the other hand, the separation between Savera and Vasta helps us in that because in some capital cities where we had our own schools, a partner school said, well, but my most difficult competition is you, I mean, it's your own school. And now we have separate companies. And Paulo is working with a certain group of clients, and I will be working with a different group of clients. So I mean, you asked what are the processes we have to address any possible conflicts of interest.
The process we have is dialogue, conversation. We've always had open dialogue in the company. Every time we had to open a brand that was regionally important and offer that to partner schools, we always sat down and talked to maintain the ecosystem healthy and harmonious. I think that our history in the last few decades is a very nice track record. As Paolo mentioned, we have a number of our own schools, 1% approximately.
And we have a large number of partner schools, 99% are partner schools. And so we have a lot of room to grow without having any conflicts of interest. Now the second question is about perhaps imagining these 4 units from now onwards in 5 years and a moment when the strategies will be more mature in your operating metrics, cash flow or EBITDA, what would be the size and the contribution? I mean, of course, you will not have concrete numbers, but maybe a ranking of the 4 companies, which one would be the largest unit? It's very difficult to answer this question without providing prospect data and we cannot provide prospect data.
But qualitatively, B2C in higher education is much bigger than the other companies, BRL 5,000,000,000. The 2nd largest has BRL 1,000,000,000 in revenue. So naturally, in 5 years, higher education and it's going to continue to grow. As of 2021, it will continue to grow. So and we want post secondary education to continue to grow.
So it will probably continue to be our largest operation, remembering that B2B in K-twelve and in higher education has a mission to be high growth companies. They'll probably grow faster than any other companies. And so the difference will be reduced because there will be disproportionate growth. And in B2C, we have a trigger, which is the level of efficiency and the speed that we will need, the time we will need to bring B2C schools at a more mature level. When they come to this level, then we will be comfortable to allocate capital and grow via greenfield projects and acquisitions.
It depends on how long it will take and how much capital we'll be able to allocate. We have investment committees in the organization under the holding. It's not in each company. Each company has its different characteristics. So high growth companies will require more investment than their size.
The PLATOS platform will require investment to grow, and maybe it's going to be more than its cash generation in the 1st few years. This is not a problem. However, the holdings investment decisions will be based on the return on invested capital. So we will always be thinking about the company as a whole. So the companies will be separated.
The companies will be isolated and connecting to that link while they are while they don't have other shareholders, I mean, while they don't have other owners, the decisions will be made by the holding company. But if and when we have other shareholders in each company, then investment decisions will depend on each company, because it will have a different group of shareholders. But until that happens, if that happens, the holding will make decisions based on the return on invested capital. We have time for one more question. Carlos Montero from Salo Consutoria.
Carlos Montero, The question goes to Rodrigo. First, congratulations on your leadership in this process of transformation. It's been fantastic. Now my question is the following. The Board of Directors that will be set up will have 7 members.
4 are not directly related to education. Then another open company has been through this experience and the results were no good because they well, they had experts, they had specialists, but they were not from education. So they didn't have this background from education. So now this idea that we will have 4 directors in the Board who do not come from the educational background, does that show a new trend? And does that signal to a new trend?
And if this will really happen, are we not perhaps coming out of the focus? I mean, you mentioned that the purpose is for Brazil to grow via education. It's a very good question, Montero. Thank you for the question. So we have an opportunity to clarify.
That's why we now have a Board of Founders, which is a structure made up by educators. I think you know all the 5 members and the Board of Founders so that we don't lose our DNA. Now we also neutralize this risk because of the 4 independent directors. 2 of them have been with us for 5 or 7 years already working in an educational company. So I mean, they know they live in the world of education for a while now.
So we wanted to keep the education skills, which are key for our educational operation. But at the same time, we want to bring new skills, which will be key for this new phase.
We're looking for the perfect balance between educators, non educators, the link between senior management and the board, always preserving our education DNA. And I'm pretty sure that the new governance will only add value the organization. Thank you very much. Good evening and see you next year on the 1st COVID-nineteen day or the second one in history.