Edtech start-up LEAD became India's sixth edtech unicorn ealier this month after securing $100 million in a fresh round funding, at a valuation of $1.1 billion. The Series E round was led by WestBridge Capital and GSV Ventures. The company’s valuation has doubled in the last 9 months on the back of strong growth in its operating and financial metrics. The latest funding is its fifth round of institutional funding since 2017.
The Mumbai-based company plans to use the funds towards product and curriculum innovation, growth of its footprint and hiring talent across functions.
In an interview with Business Today, Sumeet Mehta, co-founder and CEO of, LEAD, delved deep into the start-up’s mission and growth perspectives. Edited excerpts.
BT: LEAD’s stated mission is to transform school education by bettering core learning for the under-privileged. Can you elaborate?
Sumeet Mehta (SM): Our belief is that if schools run well, then we can make a transformative impact on learning. If the six hours a child spends in school are spent well, then there isn't any need for supplemental education and tuitions. Schools should do their job better. School is a complex system. While the core of schooling is learning, if other parts are ignored, then learning will find it hard to take root. With that insight, we are building an integrated school system, which at its very core, solves for the learning challenges by providing schools everything that they need to deliver good learning.
They need teachers to teach well, they need teachers and students to have the right materials to engage in learning, and they need schools to follow the right process of teaching, testing and remediating so that students are not taking gaps forward. In the traditional world, a publisher will just give the material, a smart class will just put the hardware, a teacher trainer will train teachers. It is left to the school to put it all together and most schools struggle with that. So we made an integrated learning system where everything that a school need is provided by LEAD, including books, workbooks, lesson plans, video and audio resources, classroom hardware, and even a monitoring tech layer to ensure everything is working well and the student data is being analyzed and students are then remediated. That's the core of the LEAD operating system.
BT: Please throw some light on the integrated operating system?
SM: It operates on a 3 A solution - Academics, Admissions, Administration. The LEAD integrated school system solves for all three. The genesis and the core of our three A solution is academics. In academics, we have broken it into three very simple principals. One is - who is teaching? In India, one of the largest problems is availability of high skill teachers. Our LEAD teacher app empowers teachers with resources, materials and plans which can make an average teacher teach at an excellent level. Second is - what is being taught? That takes us into the land of content and curriculum. Our content is not just the textbook, there is audiovisual content and kinesthetic activities linked to the curriculum so that learning is active and multimodal. The third thing is - how is it taught? We have brought in pedagogical innovations to ensure every child is paid attention and every child is able to learn. If you solve the ‘who’, ‘what’, how’, then you have an academic system which really can deliver learning outcomes.
We also realised that if we have to make schools successful, we have to work on other layers. So we now drive admissions into schools through the LEAD enroll product which basically provides schools leads and gives them a CRM to convert those leads into admission.
On the administrative front, a student’s schooling lifecycle, from joining to studying and then finally exiting school, all those process workflows are mapped on the administrative ERP, so that a school has an end-to-end, one-stop solution for all their needs.
BT: How are you disrupting teacher training?
SM: Our thesis was that we have to fundamentally disrupt the teacher development model. We did it in two ways. Firstly, instead of telling teachers what to do, we gave them the material to use. We provide them exemplar lesson plans which are designed by experts. As they start putting those lesson plans into practice over 140-150 days of the year, they automatically become better. Secondly, we provide learning materials in bite-sized pieces. These are three-minute videos, and teachers can see them in the anonymity of their homes so that he/she doesn't have to feel embarrassed about asking doubts, sometimes about fundamental concepts, in a training room.
BT: What is the change you are able to bring via your academic programs?
SM: We've taken a very contextual approach to innovation in content. So let's take English first because most of our children go to English medium affordable private schools. In an English medium school, the big challenge is that students come from vernacular families and when they teach Math or Science in English, they find it hard to understand. Therefore, we have to first solve the language challenge. We have created a program to help them build their ability to speak through phonics, build vocabulary through exposure to text, build ability for reading comprehension and write independently. This program is called English Language and General Awareness (ELGA), it’s a copyrighted program. Results are fantastic.
When we do a beginning-of-year assessment in our schools, students come in with 1.5 to 2 years of gap, which means a class five student is at grade three level. In two to three years’ time, we’re able to cover all of those gaps, so that the child comes to his/her grade level of English. Similarly, for math, we follow the Concrete Pictorial Abstract (CPA) approach and we follow an activity-based approach to teaching Science. The result is that when students start our programs, they're at an average of 50-52 per cent of class mastery and the class composition is that only 29 per cent students are above the 70 per cent mastery mark.
Within 6-12 months, our class average goes above 70 per cent and the class composition changes where instead of only 29 per cent being above 70 per cent, now 70 per cent students are above the 70 per cent mastery mark. That’s the massive shift we are able to bring in terms of student learning outcomes in our academy program.
BT: What’s the market size you are targeting?
SM: Before 2000, over 70 per cent of students used to go to government schools. Currently, only 53 per cent go to government schools. With each generation, people come from government to low-fee private, from low-fee private to affordable private, and from affordable private to high-fee schools. That's been the gradual growth. It would continue for the next 20-25 years. If I just look at the transition between layers, because we [LEAD] are in the middle, there are a lot more students coming from bottom to up than going from us [LEAD] to up. Currently our serviceable market is about 120 million students. By 2026, it will grow to about 170 million students, both by the migration from the bottom to the top layer and total number of enrolled students going up.
BT: But how many of these schools can afford your solution?
SM: Any school which has a total fee, including tuition fee, books and materials, and annual fee, all put together, about Rs 1000 a month and above can afford us very easily. That’s if total spend of a parent is about Rs 1000 or hire, they can hire us easily. In India, there are 175,000 to 200,000 schools in that segment. For a typical school, its cost of student books, materials and smart classes, all put together is typically 12-15 per cent of the school fees. Our per students per year fees is similar because we want to be a replacement of their existing spend and not add additional expenditure to the parent.
BT: What’s your growth outlook for the future?
SM: The company has seen rapid adoption in the last 4 years and will enter academic year 22-23 with 5000 schools across 500+ cities in India with an annual revenue run-rate of $80 million. We’ll serve close to 2 million students. By 2026, we want to be serving 25 million students across 60,000 school and hitting a $1 billion ARR [annual recurring revenue] number. We are a year and half away from profitability at a company level. At a unit level, we are very profitable.
LEAD’s focus is ‘Bharat’, which is where most of the schools in the affordable and the low fee segments are. That is its medium-term focus. Our long-term strategy involves looking at international markets. We want to look at markets where there is a gap in supply of good quality schooling and there are other markets, similar to India, within Asia and in Latin America.
Copyright©2022 Living Media India Limited. For reprint rights: Syndications Today