Lead School becomes third unicorn of 2022 after $100 million funding

Edtech firm Lead School has raised $100 million from investors led by GSV Ventures and WestBridge Capital, doubling its valuation in less than a year to $1.1 billion.

The Mumbai-based company, which provides tech-enabled solutions to schools with a focus on digital learning through an online or hybrid model (of physical and digital) of classrooms, had raised $30 million in April last year.

The financing round makes Lead School the third startup to enter India’s unicorn club in 2022, after direct-to-consumer brand Mamaearth and Fractal, an artificial intelligence firm. It is also the sixth Indian edtech company to reach unicorn status. Unicorns are privately held startups with a valuation of $1 billion and above.

Lead School ties up with schools instead of going direct to children.

“In K-12, everyone has been talking about edtech that is direct to students by circumventing schools. And everyone focuses on test prep and tuitions. Because people have accepted that schools cannot be improved. But we thought differently,” Sumeet Mehta, cofounder of Lead School, told ET. “That’s why we focussed on a school-based edtech (solution).”

According to Mehta, Lead School works with 5,000 schools across 500 cities. By the start of the next fiscal, the company aims to reach 2 million students across the country. Mehta said the edtech firm has hit an annual contract value (garnered from partnering schools) of $80 million in 2021-22.

India has about 1.5 million schools, of which half a million are privately run. Mehta said Lead School has reached just 1% of that number which is 5,000. "Lead adopts an outcome orientation for schools. Students’ learning outcomes have improved by 20-25%... This funding will funnel much-needed innovation towards schools in India,” Mehta said.

Last year, Lead School, cofounded by Mehta and Smita Deorah in 2012, strengthened its leadership team with several appointments, including that of Ritwik Khare (chief commercial officer), Harsh Kundra (chief technology officer) and Vipul Redey (chief excellence officer).

“Lead’s growth last year, despite Covid disruptions, underlines its consumer-first approach and deep focus on learning outcomes. We are excited to double down our investment in Lead, to support its mission of transforming the education sector in India,” said Sandeep Singhal, managing director at WestBridge Capital.

In 2021, the Indian edtech sector saw tutoring platform Vedantu, executive education platform Eruditus, as well as upskilling platform upGrad raise equity funding and join India’s unicorn list.

On Tuesday, ET was first to report that large Indian edtech companies, including Byju’s, Unacademy, upGrad and Vedantu had grouped together to adopt a self-regulatory code. Called ‘India EdTech Consortium’. the consortium of 15 edtech companies formed under the aegis of the Internet and Mobile Association of India were expected to adhere to a “common code of conduct”.

This comes at a time when Union Minister Dharmendra Pradhan said that his office is in discussions to draw a regulatory policy for the rapidly growing Indian edtech sector.