How LEAD School scaled revenues 2X during COVID hit FY21


Mumbai-based LEAD School has established itself as one of the rare companies in the Indian edtech space which is working towards improving existing infrastructure in schools in a bid to improve the quality of education for students. The company works with K-12 institutions, providing them digital resources, books and designing curriculum.  

The eight-year-old startup had raised $30 million in its Series D funding round led by GSV Ventures in participation with existing investor WestBridge right after the conclusion of FY21. We went through LEAD School’s financials for the fiscal marred by the COVID pandemic to understand how the company adapted during FY21.

The shift to online school and digital teaching in 2020-21

The company posted operating revenues of Rs 57.1 crore for the fiscal ended in March 2021, recording a 2X jump as compared to Rs 28.6 crore earned during the previous fiscal. As schools were shut for the most part of FY21, LEAD School provided a platform for students and teachers to organise classes online under its School@Home programme. It claims to have a presence in over 2000 schools across 400 cities, touching over 8 lakh students in India.

The company provides teaching aids including devices and textbooks to its client schools apart from curriculum advisory and support services. And the sale of these products was the income driver for the company, accounting for nearly 99% of its revenue during FY21 while service fees accounted for the rest.


Employee benefit expenses are the largest cost centre

LEAD School spent nearly Rs 18 crore to procure books, teaching aids and devices during FY21, 105% more as compared to the Rs 8.75 crore spent during FY21. These costs accounted for only 10.2% of the annual expenses. Transportation and warehousing/rent of these goods cost the company Rs 6.06 crore during FY21.

Employee benefit expenditure was the largest cost centre for the Elevar-backed company, making up 53.4% of the aggregate costs during the last fiscal. Such costs increased by 182.2% from Rs 35.3 crore in FY20 to Rs 99.62 crore in FY21 as the company increased its workforce across all verticals last year.

Fees paid to external consultants and education professionals was also a large expense for LEAD School, accounting for 12.32% of the annual costs. These payments surged 4.7x to Rs 23 crore in FY21 from only Rs 4.9 crore paid out in FY20. The edtech company also spent cash to reach a wider market for its products and business promotion costs blew up 6.5x to Rs 19.3 crore in FY21 from Rs 2.95 crore spent in FY20.

Growth of scale and cash burn during the pandemic

As per its annual statement, LEAD School was not impacted by the COVID 19 pandemic as its member schools moved to the online class model. However, the company made a provision of Rs 4.72 crore for doubtful debts—10.3x more as compared to FY20.

Along with the growth of scale, the company’s annual expenses also grew by 128% to Rs 186.6 crore in FY21 from Rs 66.4 crore spent in total during FY20. On a unit level, LEAD School spent Rs 3.27 to earn a single rupee of revenue in FY21, which is on par with FY20.

lead school

The growth stage startup now has access to capital to fuel its growth and reach to more K-12 institutions across India, which is evident by its cashburn. Annual losses have surged by 153% from 36.4 crore in FY20 to more than Rs 126 crore in FY21 while EBITDA margins have worsened to -203.31%.

Secondary transactions during FY21

During the month of May 2020, the Mumbai-based company raised Rs 210 crore in a Series C round led by Westbridge Capital. Right after this round, secondary share sale transactions worth Rs 46 crore took place. LEAD School’s largest shareholder, Elevar Capital offloaded shares worth Rs 45.2 crore to WestBridge while cofounder Smita Deorah bought shares worth Rs 80 lakh from early backer Neeti Salva. 

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