Exclusive: Leap Finance in talks to raise $100 Mn; seeks over $1 Bn valuation

Leap Finance, a fintech platform for Indian students pursuing higher education overseas, is in talks to raise around $70–100 million in a new round, according to two sources aware of the development. The company is seeking fresh investment after more than two years of its Series D round.

“Leap has been doing well for the past two years which attracted interest from several investors including internals,” said one of the sources requesting anonymity as talks are private. “The firm is in talks with at least three new investors to raise up to $100 million in Series E round.”

Leap is likely to become a unicorn with this round, said sources.

San Francisco-incorporated Leap last raised $75 million in its Series D round led by Owl Ventures with participation from Steadview, Paramark Ventures, Jungle Ventures and Peak XV in June 2022 in a valuation range of $850-900 million. Its exact valuation, shareholding and revenue couldn't be ascertained as the firm parent entity isn’t registered in India.

“The terms of the deal are currently being negotiated with two of the three new investors and Leap would finalise lead for the new round in a few weeks,” said another source who also wished not to be named. “It’s seeking $1 to 1.2 billion valuation in the Series E.”

Sources assert that Leap has grown multi-fold since its Series D round.

The firm enables educational loans for students keen on pursuing education in overseas universities. It offers test prep apps for IELTS, TOEFL, SAT; admissions and visa counseling as well as financial offerings through LeapScholar, LeapFinance, and Yocket. It also assists with international bank accounts, credit cards, and money remittance.

“The new round will be a mix of primary and secondary capital, and some early investors including angels may take partial or full exit from the company,” said the source quoted above.

Leap has declined to offer comment on the story. Queries sent to Owl Ventures, Jungle Ventures, Steadview and Peak XV did not elicit any response until publication of the story.

The five-year-old firm has raised $175 million until Series D round and claims to have funded more than 3,000 students since 2021. It largely focuses on institutes in the US, Canada, UK and Australia.

While edtech startups have been struggling to raise funds for the past couple of years, overseas education-focused finance platforms have cornered decent funding during the period. As per data compiled by TheKredible, Leap and its competitors such as Auxilo, Avanse Financial, Financepeer, Propelld, Grayquest, Mpower Financing and Eduvanz collectively cornered around $500 million in the last 24 months.

The strong preference to study abroad for superior exposure is a significant growth driver for companies like Leap, Leverage Edu, and CollegeDekho. Incred, a prominent player in the overseas educational loan space, reported that such loans accounted for 21% of its total disbursal in FY24. According to InCred’s founder, Bhupinder Singh, the growth prospects and increasing awareness in this segment have contributed to its [overseas educational loan] rapid expansion.