Mumbai-based edtech unicorn LEAD has raised $20 million (INR 160 crore) in debt from venture debt firms and banks, just a day after it cut its workforce of 2,000 people by around 1-2%.
The company’s latest round of funding was through a combination of long-term capital from Stride Ventures and Alteria Capital and working capital funding from banks such as Standard Chartered Bank, HDFC Bank, and ICICI Bank.
The edtech company plans to use the new capital to fund its organic and inorganic growth ambitions. Last Friday, LEAD inked a deal with London-based education firm Pearson to buy its local K-12 education business in India.
It said the acquisition is being financed through a combination of new fundraising and internal additions, without giving further details.
Founded in 2012 by Sumeet Mehta and Smita Deorah, LEAD’s integrated school system provides software, hardware curriculum, books, school kit and training.
Sumeet Mehta, Co-founder and CEO of LEAD, said, “Traditionally, startups have limited options 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 largest banks and largest venture debt funds, adding value to our shareholders.”
He added, “LEAD is poised for two-fold growth and this latest round of funding will help us accelerate our mission to provide high-quality integrated school edtech solutions to over 60,000 schools across India by 2026.”
The development comes as edtech unicorns are seeing losses, layoffs, slowing expansion plans, and trying to burn as little cash as possible amid a financial winter. Last month, LEAD raised $4.2 million in a debt round from venture debt firm Alteria Capital.
In January 2022, the edtech company raised $100 million in a $1.1 billion Series E funding round led by WestBridge Capital and GSV Ventures. After joining the unicorn club in January last year, the company announced a plan to liquidate nearly $3 million in employee stock for its employees. But in August, like many other companies in the edtech sector, LEAD laid off around 100 employees to cut costs.
LEAD’s standalone loss tripled to INR 397.1 crore in the 2021-22 financial year from INR 126.1 crore in 2020-21. Its revenue more than doubled to INR 133.2 crore in FY22 from INR 57.1 crore in FY21.