Westbridge-backed LEAD on January 6 said it had acquired learning company Pearson’s K-12 (kindergarten through standard 12) business in India, days after the school edtech unicorn reported a net loss of Rs 397.1 crore for FY22, more than three times the loss in the previous fiscal.
The acquisition of Pearson’s K-12 learning business is being funded through a combination of new fundraise and internal accruals, LEAD said in a statement.
The acquisition, which was approved by the Board of Directors of both companies, is expected to be completed by the first quarter of the calendar year 2023 subject to some closing conditions, LEAD said.
“School edtech is poised for sustained growth post-Covid and with the acquisition of the local K-12 learning business of Pearson India, we will be able to reach more schools and students in the service of our mission to provide excellent education to every child," LEAD co-founder and CEO Sumeet Mehta said.
According to the unicorn, Pearson India caters to private, English medium CBSE and ICSE schools offering high-quality blended learning solutions.
With this acquisition, LEAD would immediately expand its reach to over 9,000 schools and enhance its product portfolio to cater to the entire spectrum of over five lakh private schools in India, the company said.
In an interview to Moneycontrol in December, Mehta said the company planning to enter high-fee and very low-fee schools and expected to have a presence in all three segments by November 2023. The acquisition seems to be a step in that direction.
Founded by Mehta and Smita Deorah in 2012, LEAD works with more than 3,500 schools in tier 2 and 3 cities and beyond to make classroom learning technology-enabled. This involves tracking teacher and student progress, managing school operations on the cloud, and providing digital resources to make learning more engaging.
“This acquisition will unlock synergies and build on our combined knowledge, experience, and technology strengths to bring 21st century school edtech innovation to India’s schools,” Mehta said.
The acquisition also comes almost a year after the startup catapulted to the coveted unicorn club raising $100 million at a valuation of $1.1 billion.
With children returning to schools, LEAD's total revenue more than doubled to Rs 141.6 crore in FY22 from Rs 60.5 crore in FY21, the startup's filings with the Ministry of Corporate Affairs (MCA) showed. The company's revenue from operations also more than doubled to Rs 133.2 crore in FY22.
Its total expenses grew to Rs 538.7 crore in FY22 from Rs 186.6 crore in the previous fiscal, as its employee costs surged over 2.5 times during the year.
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