Edtech unicorn Lead School witnessed a 3.1x jump in its net loss, to Rs 397.1 crore in FY22 from Rs 126.1 crore in FY21, as expenses rose on higher customer acquisition.
Addressing a 183% rise in expenses, a Lead spokesperson responded to VCCircle's queries saying, "Last year was impacted by Covid. We had to double our support to schools since some were running online and some offline.
"Post Covid, school-focused edtech in India is poised for growth," the spokesperson added.
The unicorn's expenses came in at Rs 528.7 crore versus Rs 186.6 crore YoY.
Out of the total expenses, close to 22% pertains to direct and servicing costs of existing schools while 33% is related to sales and marketing costs.
Lead's employee expense, which accounted for nearly half of the costs, surged to Rs 258.8 crore, up from Rs 99.6 crore in FY21. It also paid Rs 48.6 crore to external consultants and education professionals in FY22, up from Rs 22.9 crore in FY21.
With the resumption of offline schooling last fiscal, Lead has also reported a rise in promotional cost, to Rs 76.5 crore, as compared to Rs 19.3 crore in the fiscal before.
On the topline front, the WestBridge-backed company’s revenue more than doubled to Rs 133.2 crore from Rs 57.1 crore, as per the audited annual financial results available with the Registrar of Companies.
“Our product has seen adoption due to which we have been able to grow our total income by 2.3x viz-a-viz the previous financial year,” Lead said in its financial statement.
Despite a rise in loss in FY22, the company claims to have a clear path to profitable growth as it scales its business. It claims to be adding about 8-10 schools every day to its list of clients. Till December 2022, the company was offering its services to close to 3,000 schools across the country.
"We expect to close FY23 with a revenue 2x higher than our FY22 figure," the spokesperson said.
Sales expenses, which include acquisition costs incurred to acquire and onboard more than 1,500 new schools, will reap economic benefits FY23 onwards, the company said.
Founded by Sumeet Yashpal Mehta and Smita Deorah, Lead began operations in 2012. At that time, the Mumbai-based company ran affordable schools and taught middle-school students. In 2017, it rolled out its platform, the LEAD School Integrated System, which offers core schooling courses with its tech-integrated solutions.
Lead raised $100 million in a Series E funding round led by WestBridge Capital and GSV Ventures, in January 2022. The round helped the company turn into a unicorn, a privately-held company valued at $1 billion or more. It also counts Elevar Equity and GSV Ventures as its investors. In total, the company raised $175 million from marquee investors.