by Chief Financial Officer Chia-Hua (Phyllis) Chen
As AI continues to reshape the educational landscape, user acquisition and retention have become the new strategic battlegrounds for AI-driven EdTech startups.
In 2025, the average customer acquisition cost (CAC) for education platforms has surged by 19% YoY, now averaging $42 per user. This uptick is largely due to increased competition from both traditional players and emerging AI-native solutions. The proliferation of free AI tools has elevated user expectations, making it harder—and costlier—to convert and retain learners.
But the silver lining? AI startups that integrate adaptive learning journeys and seamless onboarding are seeing retention rates upwards of 67%, a strong sign that engagement-first design pays off. Additionally, platforms with strong community features and real-time feedback loops are benefiting from organic growth and referrals, lowering their effective CAC over time.
At Brainstream, we believe the key lies in understanding the learner’s journey deeply:
- What pain points push them to seek AI-driven help?
- Which features deliver immediate value?
- How can we convert sporadic users into daily learners?
Tracking metrics like activation rate, retention cohorts, and referral conversion is no longer optional—it’s essential to prove both traction and scalability to investors.
In an era where users can try ten tools before sticking to one, loyalty is not built with features alone—it’s built with value, experience, and trust.