The Market Play

Indian education industry has been undergoing a revolutionary phase owing to digitisation with the eruption of edtech platforms such as Byju’s and Unacademy, eventually broadening the spectrum of students’ aspirations.

With overseas education being a dream of most Indians, being a fintech cum edtech start-up, Leap Finance is able to cash in on these changing dynamics of the education industry. The share of students wanting to study abroad has increased multifold over the years due to the pro-immigration policies of countries such as Australia and Canada. With the Biden administration in place, the US’s immigration policies have also taken a diplomatic stance for the Indian students.

In the United States alone, Indian students constitute 25% of top US graduate programmes.

That being said, there has always existed a growing need for one stop solution for counselling, guidance, finance among Indian students. There are students called “value maximisers” belonging to the lower middle income group. They are the ones who aspire to have a global career but can’t afford a degree abroad. Alongside them not being able to afford the hefty tuition fee and the expenses of accommodation, their main aim remains to gain the most lucrative option out of the plethora of offers they have at their disposal. Such students most often lack collateral, thus their chances to avail a loan minimizes along with their aspirations. The market thus provided a fertile ground for a business offering for these services to flourish.

Leap Finance offers not just loans on nil collateral but also assisting overseas students to open bank accounts in countries of USA and Canada along with a credit card. Customer satisfaction remains their sole priority, hence, along with assisting students through their Youtube channel called Leap Scholar, the start-up also helps students avail credit card services, provide them with Visa assistance, IELTS and GRE counselling, internship advice etc.

Gaining Investors’ Trust

In March 2020, the company raised its seed funding for $5.5 million led by Sequoia Capital, with participation of Bhupinder Singh of Incred and Kunal Shah, founder of CRED. The principal investor at Sequoia, Ashish Agarwal, cited the strong need for approximately $15 billion credit as the reason for market’s attractiveness, which is amplified by Leap’s mission-driven team, that made the investors place their bet on the start-up.

The capital was used to expand the company’s user base, focus on product development essentially with plans to expand the service to countries like Vietnam and Indonesia.

In March 2021, the start-up raised a whopping sum of $17 millions in the investing round led by Jungle Ventures. At the time they had a user base of 5 lakhs registered international students and 2 lakhs active users on the platform.

Securing funding at a time when the global pandemic has dampened students’ ambitions, did prove a challenge to the Leap team. However, they held their grounds. According to Amit Anand of Jungle Ventures, it was the sheer motivation and patience of the student community, especially the ones who held back their admissions at foreign universities, that encouraged hundreds more students to pursue education abroad.

In an interview, Vaibhav in fact talked about Covid-19 being a boost to their business to the extent that 2021 might even turn out to be a breakout year. Agarwal of Sequoia Capital, being impressed at the company’s approach towards tackling the pandemic, was particularly in awe with Leap Scholar – a counselling service provided by the start-up – which helped the start-up strengthen its foothold in the market. Amidst the lockdown hiccup, the company cashed on their online property.

The team aims at using the capital from Series B funding to expand their product portfolio into creating non-lending products in order to dive deeper into new markets.