iLearningEngines is Poised for Significant Growth Amid EdTech Boom

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Written By Keziah Monique Gayo

iLearningEngines, a recent de-SPAC, has seen a 26% decline in its stock since its listing. The company offers an AI-powered EdTech platform, positioning it well to benefit from the expected growth in the EdTech market driven by AI advancements.

The market is projected to grow at a CAGR of 13.44% until 2030, reaching $348.41 billion. Given iLearningEngines’ AI-first platform, it is anticipated that its market share will expand, potentially reaching $1 billion in annual revenues by 2027.

Company Overview

Credits: DepositPhotos

iLearningEngines provides an AI-powered learning and work automation platform tailored for enterprises. This platform automates tasks in corporate training and development, creating targeted training materials, streamlining content delivery, and personalizing the learning experience for employees.

Additionally, it analyzes data to provide insights into learning effectiveness and employee performance, enabling companies to make data-driven decisions about their learning strategies.

On April 16th, iLearningEngines completed its SPAC merger with Arrowroot Acquisition Corp and began trading publicly. The company secured a revolving credit facility of up to $40 million, with the potential to increase by an additional $20 million, drawing the full $40 million and bringing the total gross proceeds from its SPAC deal to $92.8 million.

A portion of these funds was used to repay term loan credit facilities, with the remaining proceeds earmarked for future growth opportunities. As of April 30th, the company held cash and cash equivalents of around $28 million.

In Q1 2024, iLearningEngines reported a 33% YoY revenue growth from $94 million to $124.9 million. The company’s annual recurring revenue (ARR) also grew by 34% YoY from $357.3 million to $478.9 million.

Growth Drivers and Financial Performance

The company’s rapid revenue growth is largely due to its impressive net revenue retention rate, highlighting its ability to upsell to existing customers. At the end of Q1, iLearningEngines’ trailing 12-month NRR was 132%, up from 125% in the prior year. This compares favorably with other companies offering LMS and HCM solutions.

While not yet profitable on a GAAP basis, iLearningEngines reported adjusted net incomes of $6.8 million, $2.8 million, and $4 million in 2020, 2021, and 2022, respectively. For FY 2023, the company posted a GAAP net loss of $4.4 million, impacted by a $14.1 million change in the fair value of convertible notes. Excluding this charge, the adjusted net income was $9.7 million. In Q1 2024, the net loss was $25.9 million due to one-time charges, but the adjusted net income was nearly $4.7 million.

The company’s revenues grew at a CAGR of 43.5% from 2020 to 2023. R&D costs and SG&A costs have been declining as a percentage of revenue since FY 2020 and FY 2021, respectively. Consequently, the operating margin has expanded from 3.53% in FY 2021 to 4.05% in FY 2023, continuing this trend in Q1 2024.

Industry Tailwinds

The forecasted growth in the EdTech market and the company’s reliance on AI for its solutions form the core of the bullish outlook for iLearningEngines. According to Grand View Research, the EdTech market grew from $89.49 billion in 2020 to $142.37 billion in 2023, and is expected to reach $348.41 billion by 2030.

The growth is driven by the need for upskilling and reskilling due to rapid technological changes. EdTech platforms offer flexibility and scalability for delivering targeted training programs, enhancing employee satisfaction and development through personalized learning paths and micro-learning modules.

AI’s role in providing personalized learning experiences, optimized content, and data analysis for continuous improvement is crucial for the EdTech market’s growth. AI-driven platforms like iLearningEngines can personalize training programs, conduct predictive analysis to identify skill gaps, and ensure employees have the required skills for their roles.

Revenue Projections

iLearningEngines’ market share in the EdTech market is expected to increase due to its early focus on AI. The company’s market share grew from 0.16% in 2020 to 0.29% in 2023. Based on assumptions of market share growth, iLearningEngines’ revenues are projected to be:

  • 2024: $557.6 million
  • 2025: $720.8 million
  • 2026: $931.8 million
  • 2027: $1.18 billion
  • 2028: $1.50 billion
  • 2029: $1.87 billion
  • 2030: $2.34 billion

This forecast implies a CAGR of 27% from 2024 to 2030 for iLearningEngines, compared to the EdTech industry’s CAGR of 13.44%.


iLearningEngines has a cash balance of $28 million and debt of $115.8 million, resulting in an enterprise value of $1.32 billion at the current share price of $9.14. Based on revenue projections, the company would be trading at forward EV/sales multiples as follows:

  • 2024: 2.37
  • 2025: 1.83
  • 2026: 1.42
  • 2027: 1.12
  • 2028: 0.88
  • 2029: 0.70
  • 2030: 0.56

These multiples indicate that iLearningEngines is undervalued compared to other LMS and HCM companies trading at an average forward EV/sales multiple of 5.5. The current discount is likely due to the negative sentiment surrounding SPACs, but iLearningEngines’ AI-powered platform offers several benefits that could attract more investors.

Applying a 5.5 EV/sales multiple, the price targets for iLearningEngines until 2030 are:

  • 2024: $32.55
  • 2025: $41.92
  • 2026: $54.24
  • 2027: $68.94
  • 2028: $87.58
  • 2029: $109.17
  • 2030: $136.91


The main risk to iLearningEngines’ growth is its revenue concentration. In FY 2023, 63.4% of its revenues came from its top 4 customers. Losing any of these customers could significantly impact the company’s growth prospects.

Therefore, iLearningEngines needs to diversify its customer base to mitigate this risk.


Credits: DepositPhotos

iLearningEngines has significant growth potential due to its AI-powered EdTech platform and the forecasted expansion of the EdTech market. The company’s focus on AI for personalized learning experiences and optimized content positions it well for future success. Despite the current undervaluation due to SPAC-related negative sentiment, iLearningEngines’ strong fundamentals and industry tailwinds support a positive outlook.

The projected revenue growth and operating leverage indicate a promising future for the company, with substantial upside potential.


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