Edtech unicorn LEAD, backed by Westbridge, has demonstrated impressive financial performance for the fiscal year 2022-23. The Mumbai-based company reported a reduced loss of Rs 321.9 crore for FY23, marking an 18.5% decrease from the previous year's loss of Rs 395.3 crore. Simultaneously, LEAD more than doubled its operating revenue, with a substantial 106.4% surge, reaching Rs 273.2 crore in FY23 compared to Rs 132.4 crore in FY22, according to its recent financial statements. The startup's total income for the fiscal year ending in March reached Rs 295.5 crore, up from Rs 142.9 crore in the previous fiscal year.
Sumeet Mehta, Co-founder and CEO of LEAD, attributed this growth to a significant return of students to schools during the academic year 2022-2023. Improved financial standings of schools have contributed to LEAD's robust business performance, highlighting the direct impact of schools' financial health on the edtech firm.
Despite this growth, LEAD did experience an increase in overall expenditure, which rose by 14.7% to Rs 617.4 crore in FY23, compared to Rs 538.2 crore in FY22. Employee benefits accounted for the largest expense category, with Rs 285.4 crore allocated, representing an 11.3% increase from the previous fiscal year. It's worth noting that LEAD underwent a round of layoffs in January, following an earlier workforce reduction of approximately 100 employees.
In terms of other expenses, the company saw a 40.6% surge in stock-in-trade expenses, reaching Rs 134.8 crore in FY23, while other expenses, including travel and conveyance, professional fees, and promotional and publicity expenses, declined by 23.2% to Rs 137.1 crore in FY23. LEAD reported a significant reduction in cash burn by 60-70% in FY23 compared to the previous fiscal year.
LEAD, founded in 2012 by Sumeet Mehta and Smita Deorah, provides a comprehensive integrated system encompassing software, hardware, curriculum, books, school kits, and training sessions, serving over 9,000 schools, 50,000 teachers, and five million students. The company plans to expand its reach by adding another 2,500 schools this year.
Earlier in 2023, LEAD ventured into the high-fee school segment through the strategic acquisition of the local K-12 learning business of London-based Pearson. In July, it also announced its entry into the low-fee school segment in India, with a goal to improve learning outcomes for 25 million students across 60,000 schools by 2028. LEAD has raised over $171 million in funding and was valued at $1.1 billion following a $100 million Series E funding round led by WestBridge Capital and GSV Ventures in 2022.
This financial performance underscores LEAD's commitment to transforming the education sector in India and its capacity to drive growth even in challenging market conditions.
