Edtech unicorn Lead School on Wednesday said it has raised Rs 160 crore ($20 million) in a debt funding round co-led by Alteria Capital and Stride Ventures.
The announcement comes on the same day when the company has fired nearly 60 more staff in its second round of layoffs in less than six months.
The fresh capital will help finance the company’s organic and inorganic growth ambitions, it said in a statement.
“Traditionally, startups have had limited avenues for raising capital beyond equity. However, with our strong unit economics and a clear path to profitability, we have been able to attract non-dilutive, traditional capital from India’s biggest banks and largest venture debt funds, which is value accretive to our shareholders,” said Sumeet Mehta, co-founder and chief executive at Lead.
In August 2022, Lead laid off about 100 employees from its team to conserve cash. Even then, the company attributed this to its annual performance appraisal process.
Last week, the company agreed to acquire Pearson's K-12 learning business in India. With this acquisition, Lead expand its reach to over 9000 schools.
Last year, layoffs at edtech companies have become a common sight as they struggle to raise cash amid tough market conditions. More than 8,000 employees working in the segment have been sacked in 2022 by edtech firms, which include several unicorns. Some of the largest Indian edtech companies to have let go of employees include Byju’s, Unacademy and Vedantu.
Last week, VCCircle reported that the company’s losses had widened by over 3 times to Rs 397.1 crore in FY22 from Rs 126.1 crore in FY21, owing to higher customer acquisition costs.
The WestBridge-backed company’s revenue more than doubled to Rs 133.2 crore from Rs 57.1 crore, as per the audited annual financial results available with the Registrar of Companies.
The company, founded in 2012 by Sumeet Yashpal Mehta and Smita Deorah, offers core schooling courses with its tech-integrated solutions. It recently agreed to acquire Pearson’s local K-12 learning business in India, which would help it expand its reach to 9000 schools in India.
Mumbai-based Lead Westbridge entered the unicorn club in January last year, after it had raised $100 million in a Series E funding round led by WestBridge Capital and GSV Ventures. The company was valued at $1.1 billion post the round.
The firm also counts Elevar Equity and GSV Ventures as its investors. So far, Lead has raised $175 million from marquee investors.