When we were leading the Series A investment in LEAD School in 2017, here is what our investment memo articulated as the company’s objective: To bridge the learning gap in India and make quality learning affordable and accessible, by empowering existing and new affordable private schools (APS) to improve the quality of education.
It was an unconventional call to take even in those times, and 4 years and a pandemic later, one’d think that this would have changed. That the company would have gone B2C, with schools being closed and the ability to directly connect with parents and students using the digital mode. But in a world increasingly enamored with direct to home ed-tech models, LEAD continues to keep affordable private schools at the center of its offering. To understand why, let’s zoom out, and go back a little in time.
On our field visits to develop an understanding of low income households in India and how they allocate their wallet, we had learnt that moving children away from zero fee government aided schools to affordable private schools (typically in an annual fee range of $150-700) was a high priority. This choice, as mentioned in an earlier article, is driven by a) potential for improved learning outcomes, and b) English as a medium for teaching – requirements that parents believe are essential to securing a bright future for the child, and that government run schools are largely unable to meet.
Affordable private schools are set up by local entrepreneurs who see an opportunity and are typically passionate about education, but with limited access to resources to deliver quality educational outcomes.
While we had seen a lot of ed-tech companies come into the market with great products, distribution models were still not established. Also, B2B sales to schools was considered unscalable since school owners believed that the products were piecemeal and did not always work in classrooms, due to a lack of outcome or solution orientation. Consequently, the rate of trials and adoption was poor. LEAD was refreshing in their integrated solution approach, and articulation of a clear end goal – improving educational and grade level outcomes for children in the APS segment, and solving for all stakeholders involved in the process – something that resonated with school owners.
As far as LEAD was concerned, the school was the primary stakeholder in implementing their model. The LEAD School pedagogy has always been geared towards delivering multi-modal learning (visual, auditory, kinesthetic and reading / writing) and building life skills for children. The school environment is a critical component of such learning and consequently, defining the customer as an APS was a key part of the LEAD strategy.
LEAD also recognized that in order to make the school successful, it was important to double down on teachers as a key stakeholder. The LEAD school product empowered teachers with strong tools and aids to deliver education. An interesting byproduct of this was that teachers also got trained in the process, and started enjoying the improvements they experienced. This created a virtuous loop where parents, school owners and teachers were thrilled with the outcomes and aligned – a happy balance. The result? A highly successful ‘B2B’ sales model that scaled into a non-linear model, in a market that had almost given up on institutional sales to schools.
But then, Covid happened and schools closed down across India. Within 10 days of the lockdown announcement, LEAD leveraged its strong tech platform to launch the LEADSchool@Home initiative, in order to deliver uninterrupted education to children. They also doubled down on delivering at home learning by acquiring QuizNext, a gamified student assessment and practice platform. At this point, LEAD could have chosen to alter its narrative to a B2C one – a story that the market would have found far more attractive, especially in the current context.
But even as the pandemic raged, LEAD continued to build for schools and partner with them, growing from 700+ partner schools around a year ago to more than 2000 today. Their product development roadmap continued to envisage digital learning to be integrated into regular school pedagogy and not as a replacement for in-school learning. They have been investing heavily in ensuring that schools and students are future-ready (or ‘Kal ke Kaabil‘). APS schools in the foreseeable future will be delivering hybrid learning, and LEAD’s solution will enable them to make that transition.
In the 15 years we have spent in this space, and through the multiple crises that we have seen our portfolio companies weather, there have been fascinating examples of teams demonstrating tremendous strength of character in not deviating from their core strategy or customer segment. In that hall of fame, LEAD has certainly earned a prominent place.
It takes an unrelenting conviction to not disintermediate your customer – the school – at a time when there is no certainty about when they can resume normalcy. Moving towards a B2C model that is popular in the world of capital would have been easy, but LEAD was clear that this was not right for children and their long term welfare. It takes clarity and determination to keep doubling down and building in a B2B segment that has always been hard to crack. Especially so when the world around you goes crazy on vanity metrics of users, GMV and rapid growth – all of which look far ‘sexier’ in the B2C ed-tech world. This has also meant that considerable time and effort has gone into seeking aligned capital and partners who believe in LEAD’s mission and strategy.
We believe these decisions will pay back several times over – through staunch customer loyalty, demonstrated customer success, significantly improved learning and grade level outcomes, financial returns and growth in value for all stakeholders.
The current Covid-19 crisis has reminded us of the value of schools as an enabler for parents, especially in low income communities, to work and provide a livelihood. It has also shown us how all parents, even highly educated ones, struggle to engage or teach their child at home. So what we do know today is when schools reopen, low income mothers will seek out the best education for their children, strongly correlated in their minds with the English medium education provided by APS schools.
As the LEAD founders often reiterate, the primary mode of education is, will and should remain school classrooms, and no revolution in education can be complete unless we are able to maximize outcomes from those 7 hours of schooling that every child and parent so dutifully invests in. Giving them the full value of that investment and enabling the schools to do so, will finally change the education system, and deliver the revolution that will unlock the huge latent potential in India’s demographic. The ambition now is even more urgent, given the year or more of lost earning for millions of households across the country, and potential lost learning for children across the country.