How a couple is LEAD-ing the $4B Indian Ed-Tech market?
Analysis of LEAD — The unconventional Ed-Tech Unicorn.
Today’s edition is about LEAD, an Ed-Tech startup that is trying to digitize low-budget private schools.
Here’s the structure:
How it all started?
What is LEAD?
Why they became so big?
Challenges
Future
Keep reading !!
How it all started?
Sumeet Mehta and Smita Deorah were well settled in their Singaporean corporate lifestyle.
It was only in 2012 that they decided to come back and do something “BIG” for their country, India.
While hunting for problems, the couple found that the Indian school curriculum, particularly in the village and semi-urban areas were completely broken.
After months of brainstorming, they finally started an English medium school for rural children in Gujrat. In a short span of time, they opened five such schools.
But the couple wanted to solve the problem for the entire nation.
They planned to partner with schools and provide their tech-based curriculum, instead of opening schools by themselves.
In 2017, they finally pivoted to what we now know as LEAD.
So what is LEAD?
LEAD is a complete solution for budget private schools.
It provides an updated English-based course curriculum, student upskilling school digitization & marketing services along with teacher training programs for the K-10 segment.
In Jan 2022 LEAD became the sixth Indian Ed-Tech unicorn after raising $100M at a $1.1B valuation.
The startup claims to have tied up with 3K schools catering to more than 1.2M students and has a presence in 400 cities in 20 states.
In FY21, LEAD recorded a revenue of $8M as compared to $3.8M earned during the previous fiscal.
Now, let us see why LEAD became so big?
1. Ed-Tech Market:
The Indian EdTech industry is expected to reach $4B by 2025 at a CAGR of 40%.
In 2021 alone $5.8B VC money was raised across 140 deals.
India is also the home of five Ed-Tech unicorns, apart from Lead — Byju’s ($22B), Unacademy($3B), Eruditus($3B), upGrad ($1.2B), Vedantu($1B)
These make India an attractive market to build a giant Ed-Tech venture. And LEAD did exactly that.
2. Product:
LEAD provides:
Courseware: Content (video, books) and study mats to upgrade the existing strata of the school.
Software: Children, parents, and teachers/school apps.
Children can watch content, keep a track of their curriculum, and give exams.
Parents can track children's performance.
Teachers can plan the course content along with managing children
School can manage the entire operation and track the performance of children/teacher
Hardware: Provides tabs with pre-loaded content to schools/teachers.
Marketing: Will leverage its brand value and create marketing initiatives to boost school admission rates
Together, these sum up into a powerful stack to provide quality education.
3. Niche Solution (Moat):
Startups like BYJU’S, Unacademy, and Vedantu mainly focused on the ancillary education sector. In a way, their motive was to disrupt the existing solutions.
LEAD, on the other hand, leveraged the existing solutions.
Their aim was to upgrade the existing systems where they will act as an integrator.
This made them a unique solution and gave them access to a niche market.
4. Asset light model (Strategy):
LEAD focused on being asset-light since its inception.
This gave them rapid scalability at low costs.
From 14 students in 2012 to 1.2M students in 2022, Lead blitzscaled its growth.
5. Covid (Macro):
The Covid-19 outbreak expedited the use of technology in India's normally slow-paced education sector.
Many govt and low-budget private schools were forced to adapt to digital classes, online exams, and software solutions.
Seeing the opportunity, investors began pouring money into the sector that they had previously avoided.
From $0.5B in EdTech funding in 2019 to $5.8B in 2021, the funding grew by 5X in less than 2 years’ time.
6. Founders:
Both the founders (Sumeet Mehta & Smita Deorah) left their jobs in Singapore, only to solve India’s education problems.
Infact they focused on the most difficult part of the education value chain — rural and semi-urban. This shows their passion and grit to solve the problem.
Also, they bootstrapped LEAD’s journey for the initial 5 years. Only in 2017 did they start raising funds to scale up their existing solution.
LEAD has really set an example of adding value while building a business.
But like all other startups, LEAD has its own unique challenges to tackle.
Challenges
1. Competition:
Heavily funded Startups such as Teachmint and Classplus which started as creator tools are now trying to enter the school digitization space.
Besides numerous SaaS startups have popped up to digitize the school curricula.
All these will reduce LEAD’s market share.
2. Quality control:
LEAD is currently in rapid growth.
It aims to reach 25M students with an annual revenue run-rate of $1B.
This may lead to poor tech, customer support, push marketing, and poor school selection.
Lead has to keep a strong eye on its offerings to sustain its goodwill.
3. Financials:
LEAD’s loss grew by 153% to Rs 126 cr in FY-21 from Rs 36 cr in FY-20.
Expenses mounted by 128% to Rs 186 cr, with negative unit economics of Rs 3.27.
Though it's a growth-stage startup, it must work to improve its financials.
Based on the above facts and figures one thing is clear — LEAD is trying to solve some challenging problems at the ground level.
Also, instead of force selling, push marketing, and mass layoffs like most other Indian Edtechs, the startup is toiling hard to bring a change to the masses.
Will be interesting to see how the company will grow further and solve problems for Indian Schools.
Alright, that’s a wrap for the third edition of “Decrypt 🔎”.
You can read the previous two editions here:
If you have some feedback, you can always dm me on LinkedIn:
https://www.linkedin.com/in/satyakikc/
See you next week on Wednesday at 9 am sharp :)