Edtech Unicorn LEAD Raises INR 35 Cr In Debt From Alteria Capital

Edtech unicorn LEAD (earlier known as Lead School) has raised INR 35 Cr from the venture debt firm, Alteria Capital. The edtech startup has raised debt for the first time in 2022, after having turned into a unicorn earlier this year.

The board at LEAD has passed a special resolution to issue 3,500 Series A non-convertible debentures (NCD) to Alteria Capital at an issue price of INR 1,00,000 per debenture to raise INR 35 Cr ($4.24 Mn), Entrackr reported.

Before the debt round, the edtech startup raised $100 Mn in a Series E round of funding, which was led by WestBridge Capital and GSV Ventures. This was LEAD’s unicorn round, where it was valued at $1.1 Bn. 

Overall, VCs have invested close to $166 Mn in the startup since its inception.

Founded in 2012 by Sumeet Mehta and Smita Deorah, Mumbai-based LEAD is a school edtech startup. The startup enables schools to combine technology, curriculum, and pedagogy into an integrated teaching and learning system.

LEAD provides solutions such as digital resources, books, tech solutions, ERPs, and maths science kits, among others. According to the company’s website, it is present in more than 400 cities and works with 3,000+ schools to facilitate over 1.2 Mn students and 25,000 teachers.

In FY21, LEAD’s operating revenue grew 3X to INR 57.1 Cr versus the year-ago period. Surprisingly, losses, too, surged 2.5X to INR 126 Cr compared to FY20. Shortly after its unicorn round, it announced an ESOP buyback plan worth $3 Mn.

The startup fired close to 100 employees in August 2022 in its efforts to cut costs, according to several media reports. 

LEAD primarily competes with edtech startup Teachmint and several other startups in the school edtech segment and legacy companies.

It is prudent to mention that while edtech has suffered the most during 2022, due to the funding winter and COVID-19 subsidising, school edtech is a sector that should see increased growth. While the reopening of schools could be a reason to worry for India’s K-12 segment, it may give a boost to startups like LEAD and Teachmint.

To cope with the funding winter, many startups have gone for raising debt rounds like LEAD in the past few months. Recently,  Dunzo, Udaan and Rebel Foods collectively raised nearly $139 Mn in debt.

The development was first reported by Entrackr.