Two sources aware of the development claim that Leap Finance, a fintech platform for Indian students seeking higher education abroad, is in discussions to raise between $70 and $100 million in a new funding round. After its Series D round lasted for more than two years, the company is looking for new funding.
“Leap has been doing well for the past two years which attracted interest from several investors including internals,” said one of the sources requesting anonymity as talks are private. “The firm is in talks with at least three new investors to raise up to $100 million in Series E round.”
Sources claimed that Leap is expected to turn into a unicorn after this round.
incorporated in San Francisco In June 2022, Leap completed a Series D round led by Owl Ventures, in which Steadview, Paramark Ventures, Jungle Ventures, and Peak XV participated. The round was valued between $850 and 900 million. The company raised $75 million in total. Since the company’s parent entity isn’t registered in India, it is impossible to determine its precise valuation, shareholding, or income.
“The terms of the deal are currently being negotiated with two of the three new investors and Leap would finalise lead for the new round in a few weeks,” said another source who also wished not to be named. “It’s seeking $1 to 1.2 billion valuations in the Series E.”
Reports claim that since its Series D round, Leap has expanded several times.
Students who are eager to study in universities abroad can apply for educational loans through this firm. It provides financial products through LeapScholar, LeapFinance, and Yocket; test preparation apps for the TOEFL, SAT, and IELTS; and counseling for admissions and visas. Along with credit cards and money remittance, it also helps with international bank accounts.
“The new round will be a mix of primary and secondary capital, and some early investors including angels may take partial or full exit from the company,” said the source quoted above.
The five-year-old company says it has funded over 3,000 students since 2021 and has raised $175 million up to this point in its Series D round. It mostly concentrates on US, Canadian, UK, and Australian institutions.
While edtech startups have been finding it difficult to raise capital in recent years, foreign finance platforms with an emphasis on education have managed to secure respectable funding during that time. The media reports that over the past 24 months, Leap and its rivals, including Auxilo, Avanse Financial, Financepeer, Propelld, Grayquest, Mpower Financing, and Eduvanz, have collectively secured approximately $500 million.
For businesses like Leap, Leverage Edu, and CollegeDekho, the strong desire to study abroad in order to gain greater exposure is a major growth driver. One major player in the foreign education loan market, Incred, stated that in FY24, these loans made up 21% of its total disbursals. Bhupinder Singh, the founder of InCred, says that the company’s [overseas educational loan] quick growth has been fueled by the growing prospects and growing awareness in this market.
