News Update

Leap’s Net Loss Widens to INR 69.1 Cr in FY22 Despite 3.7X Increase in Operating Revenue

• ByStartupStory     |    April 10, 2023

Overseas education startup Leap recorded a net loss of INR 69.1 Cr in the financial year 2021-22 due to a significant increase in expenses, which widened by 18.2X from the previous year. Despite this, the startup saw a 3.7X increase in operating revenue to INR 23.5 Cr from INR 6.4 Cr in FY21. The majority of the startup’s revenue, INR 20.5 Cr, was generated from overseas business, while its domestic turnover stood at INR 3 Cr. The San Francisco and Bengaluru-based startup is focused on expanding its overseas education services.

Leap, an overseas education startup based in San Francisco and Bengaluru, incurred a net loss of INR 69.1 Cr in FY22 due to rising expenses, which increased 18.2 times from the previous year. Operating revenue increased by 3.7 times to INR 23.5 Cr, with a majority of the revenue coming from overseas business. However, total expenses surged 9 times to INR 92.7 Cr, mainly due to a 12.6 times increase in other expenses, such as rent and advertising expenses, and a 21.4 times increase in advertising expenses alone. Employee benefit expenses also rose by 6.8 times, with salaries and remuneration of directors amounting to INR 37.87 Cr in FY22.

Leap is a startup founded in 2019 by Arnav Kumar and Vaibhav Singh, headquartered in San Francisco and Bengaluru, which provides overseas education aspirants with services such as LeapScholar and LeapFinance. These services assist students in planning and preparing to study in foreign countries, offering bespoke financial products and solutions, counselling services, visa services, and credit for overseas education.

Leap, the overseas education startup, secured $75 Mn (INR 585 Cr) in Series D funding in 2021, with Owl Ventures as the lead investor. The company has raised over $150 Mn in total. In the challenging business environment, edtech startups in India that have been struggling with losses, macroeconomic headwinds, and tight funding have had to resort to employee layoffs to reduce costs.

Since 2022, over 8,500 employees have been laid off by edtech startups, including BYJU’S, Vedantu, and Unacademy, as per Inc42’s layoff tracker. Vedantu’s net loss widened to INR 696.2 Cr in FY22 from INR 616.2 Cr in FY21, while BYJU’S reported a 19.8X increase in its net loss to INR 4,588 Cr in FY21. The founders of the top eight edtech startups reportedly received an average salary hike of 46% in FY22 compared to FY21, according to Inc42. Unacademy’s leadership team opted for up to 25% pay cuts for FY24. Teachmint’s net loss surged to INR 131.70 Cr in FY22 from INR 5.52 Cr in FY21.

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