During the covid pandemic, when schools were forced to close their doors, demand for the services of edtechs soared. LEAD pivoted to become an online school connecting teachers with students through its platform. By June 2021, the company had around ₹300 crore worth of contracts signed, according to a former employee.
The next year, it raised $100 million in a Series E funding round led by Westbridge Capital and GSV Ventures, which valued the edtech at $1.1 billion, making it a unicorn. LEAD’s revenue increased from ₹133 crore in FY22 to ₹273 crore in FY23, while losses narrowed from ₹395 crore to ₹322 crore.
While LEAD started out well, things haven’t quite gone according to the script in the last three years. “We were acquiring schools left, right and centre, and when covid ended, we thought LEAD would actually do good, but they didn’t do that well,” the former executive cited above said. Corroborating this, five former and two current company executives Mint spoke with said school enrolment numbers at LEAD have stagnated.
Mehta, too, admits there have been school dropouts and acceptance has been a problem. But he insists that the company currently has 3,000 LEAD integrated schools, up from 1,500 in 2022. News reports from 2022, however, quote him saying that the company was working with 5,000 schools at that time. “They might have been schools who contracted with us during covid only for the online school solution but didn’t operationalize once covid went away by early 2022,” he claimed.
The company has faced challenges on multiple fronts, including schools dropping out, teacher resistance to its teaching methods, frequent technical glitches and the limitations of the platform, as well as parental pushback over costs. Investors, too, are beginning to fret over its report card.
Over the last couple of years, LEAD has had to face a hard truth: affordable private schools aren’t ready to embrace learning through technology just yet. That has forced the teaching platform to go back to the drawing board. Or rather, to go more by the book—LEAD acquired British multinational publisher Pearson’s K-12 learning business in India last year in an effort to broaden its footprint and breathe new life into its core business. Pearson has 6,000 schools on its client list, and much of LEAD’s success from here on will hinge on how it makes use of that acquisition.
The beginnings
“Both my parents are teachers,” said Mehta, who is the CEO of LEAD Group, as he explains the origins of the company. After pursuing engineering and earning a masters in business, Mehta worked for about eight years in Singapore. Each time he returned, he accompanied his father, who was inspecting schools at the time, and was struck by a realization: Schools hadn’t changed much in India.
Mehta and Deorah set up and ran schools in very small talukas in Maharashtra and Gujarat for the first five years. Towards 2017, the duo started getting inquiries from nearby schools asking if they could use LEAD’s system. They realized that offering the system to affordable schools in small towns would help the company make a better impact and began partnering with them.
Tech wasn’t the initial idea but it became a necessity, said Mehta. “We were based in Bombay and our schools were spread out. At that point, we were just forced to use technology to manage schools better and then ensure that each of the schools is consistently doing the right thing.”
Mehta and Deorah set up and ran schools in very small talukas in Maharashtra and Gujarat for the first five years. Towards 2017, the duo started getting inquiries from nearby schools asking if they could use LEAD’s system.
Essentially, LEAD’s business model focuses on integrating technology into classroom learning. The platform includes interactive lessons, assessments, and tools that help teachers. The company offers its own curriculum, digital content, assessments, and teacher training, aiming to improve student outcomes.
Schools are provided with tablets and televisions, while students, teachers and parents are all provided with apps. The teachers’ app has content and lesson plans. Students receive at-home learning materials on the student app, and parents receive tools to track their children’s progress on the parent app.
While it seemed clear enough on paper, both schools and the company’s employees found the platform a lot to cope with in reality. As one employee put it, “It’s one of the most complicated products I’ve sold. It’s SaaS (software as a service), it’s infrastructure, and it’s a concept. And you have to sell that to parents, teachers, academic directors or principals.”
When the company raised funding in January 2022, there was a strong internal recommendation to first implement the system only in onboarded schools, according to two former employees. But the founders tried to step on the pedal instead.
“There were certain commitments that had been made to investors, due to which we were forced to oversell. That’s where we fell into trouble,” said one of the employees.
The investors certainly aren’t happy at how those efforts panned out. Requesting anonymity, one of them told Mint that the company’s current scale versus its valuation in the last round is a worry. “They were able to raise a lot of money at a high price in a peak market,” he said.
As an industry executive, who also did not want to be identified, put it, “To justify its valuation, at let’s say a 12-13x multiple, it will have to have 3x the business it does now.”
High-cost platform
Once schools reopened, there was a fundamental shift as LEAD’s primary proposition took a backseat, particularly because of its cost, say current and former employees. “The frenzy for technology and audio-visual learning went for a toss because most schools could not afford it,” one former employee told Mint.
“The tech part went down and people were saying ‘give us books’. If you want to do training, we will take training, but we cannot afford all the other things,” recalls another former executive.
As schools were struggling with parents not paying fees, LEAD offered some relief. However, when covid receded and schools’ finances were still bad, they still did not pay, said Mehta. “A lot of schools actually didn’t restart and a lot of them chose to move back to traditional teaching because they had to choose survival over innovation,” he added.
“And those schools that are not implementing well get pushback from parents, saying, ‘Why are you charging us higher,’ as there is a ₹1,500 increment (the price of the LEAD integrated system over the cost of books),” said Mehta.
Teacher pushback
While the group’s solutions were supposed to ease the burden faced by teachers, many found that it only increased their workload. A teacher currently associated with the company, who requested anonymity, told Mint that it becomes very difficult to teach through the app. “The videos don’t sync with the teacher’s speed. If I take two-three minutes to read a page, the video takes double that time or more.”
“If you accidentally cancel the class on the app, it won’t continue from where it stopped but will restart from the beginning. While it’s a good initiative, there are many problems with the app plus the kind of assistance required is just not available,” she said.
Balinder Nain, founder and director of Shri Gyanendra Public school in Kalwan, a village in Haryana, regrets the day he tied up with LEAD. “They said we will give 180% growth in your students,” he said. The reality proved otherwise.
The edtech firm had approached the school with bold promises, and Nain chose to partner with them in 2022, particularly because they claimed they would address a key challenge: helping students overcome their struggles with spoken English. However, the school dropped LEAD in 2023 after facing multiple issues, Nain told Mint.
“Assistance was always a concern. They said we will monitor teachers ourselves; we will train them how to use the system. Those things were not happening,” he recalled. “Like a corporate, they just offloaded the system on the teachers. There was a lot of pressure on teachers as they were not able to understand things and were leaving. Then, the principal also left. The one year we were with Lead was very chaotic,” he said, noting that the school’s student strength came down from 700 to 350 during the year.
From the digital setup in the classrooms, to ensuring parents install the app and the teacher is using the ERP, it’s a complicated system to implement, said former employees.
But those who have worked with the company say there is more to the pushback by some teachers. “Many of them don’t want to have this very extensive, accountable system. Before LEAD, an average teacher could get away by teaching 50-60% of the syllabus,” said one former Lead employee. “If you have LEAD, everybody knows what percentage of the syllabus you’ve taught, because you have to go through the tablet.”
It’s not necessarily a resistance to being monitored—teachers are used to picking up a book and teaching, whereas the multimodal approach requires some effort and there are a few teachers who do not want to make that effort, Mehta said.
Plus, the question papers are set by the company, which was a big problem as many schools in primary classes would give students hints on what to expect in the test beforehand. “A lot of schools were against it (LEAD setting papers). Many parents also opposed because students’ marks started dropping,” said a former employee.
A few schools are not able to implement the integrated system because their old habits of teaching are deeply ingrained, said Mehta. When students move from writing rote answers to think and write in their own words, there is a transition period during which some students struggle, he added, noting that some parents were unhappy with the decline during the transition.
Riding on Pearson
In the last two years, the company has tried to make the business leaner by cutting costs, particularly by laying off a large number of people. At its peak, LEAD had close to 3,000 employees. That number is now down to about 1,200.
Some of the layoffs were a result of the company’s acquisition of Pearson’s K12 learning business last year, which is largely content and curriculum in the form of books and digital resources. Pearson is a well-recognized brand in the space and has an established school network.
“The acquisition of Pearson’s K12 gives LEAD a strong backward integration into publishing along with entry into the ICSE-based curriculum as well,” said Praneet Singhal, director of 1Lattice, a consultancy. “It also enables the company to solidify its position as the market leader in the school edtech sector and gain access to the network of schools previously serviced by Pearson.”
Indeed, the acquisition means the company’s reach will expand from 3,000 schools to 9,000 schools. It also means schools being more open to LEAD now and book distributors not seeing the company as a rival. Eventually, Mehta said, the plan is to upgrade the Pearson schools with LEAD’s integrated systems. In the next five years, he sees the company reaching about 60,000 schools.
The acquisition of Pearson’s K12 gives LEAD a strong backward integration into publishing along with entry into the ICSE-based curriculum.
— Praneet Singhal
However, the edtech firm has had to tweak its proposition. “The thing for which they fought, to stop teaching just through books and teach through tech, has disappeared. Now, they are like a publisher and not so much a tech product company,” one executive said.
While LEAD has had to contend with numerous challenges since the end of the pandemic, Mehta insists that multimodal learning is the future. “What has changed, however, is our realization that while every school requires multimodal learning, different schools are at different levels of evolution,” he added. “We have to modulate our solutions accordingly.”