Westbridge-backed school edtech unicorn LEAD's losses more than tripled in FY22 (2021-22) as the company's employee costs surged over 2.5 times during the year.
LEAD reported a net loss of Rs 397.1 crore in FY22, against Rs 126.1 crore in FY21 (2020-21), its filings with the Ministry of Corporate Affairs (MCA) showed, almost a year after the startup catapulted to the coveted unicorn club raising $100 million at a valuation of $1.1 billion.
During the year, LEAD spent about Rs 258.8 crore on employees, against Rs 99.6 crore in FY21. Apart from employee benefit expenses, LEAD's overall operational costs and other expenses that include advertising and marketing expenses, also surged more than 100 percent during the year.
The company's total expenses, thus, grew to Rs 538.7 crore during the year from Rs 186.6 crore in the previous fiscal.
In August last year, LEAD let go of about 100 employees after a performance review that, it said, the unicorn carries out yearly. Currently, the company said it has about 2,000 employees.
Founded by Sumeet 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.
For FY22, LEAD had a negative cash flow from operating activities of Rs 395 crore, against Rs 135.5 crore in FY21, the filings showed. LEAD's numbers are on a standalone basis.
However, with schools reopening amid a drop in Covid-19 cases during the year, LEAD's total revenue more than doubled to Rs 141.6 crore from Rs 60.5 crore in FY21. The company's revenue from operations also more than doubled to Rs 133.2 crore in FY22.
This comes a month after Mehta told Moneycontrol that school edtech startups might witness stunted growth with schools, that are recovering from two years of covid-effect, prioritising survival and stability over innovation.
However, Mehta also said he believes the company is witnessing tailwinds of growth with the new education policy (NEP) and the National Curriculum Framework for Foundational Stage (NCF-FS) pushing schools to innovate as they renew their curriculum for the next academic year. Mehta said the company also plans to double its revenue in FY23 over FY22 and that it is on track in terms of profitability.