Leap, a two-year-old startup with headquarters in San Francisco and Bangalore that is helping students in India find the right college abroad, prepare for entrance tests, and also secure visas and loans, said on Wednesday it has raised $55 million in a new financing round from several high-profile edtech backers.
Leap said it had raised $55 million in a new financing round led by Owl Ventures. The Series C round also saw participation from Harvard Management Company, more popularly known for being a high-profile LP to venture funds. Existing investors Sequoia Capital India and Jungle Ventures also participated in the round, following a Series B funding in March this year and bringing Leap’s all-time rise to over $75 million.
It’s a massive market that the startup is tapping.
Hundreds of thousands of teenagers and young adults get on flights each year from India to a foreign land to pursue higher education. “The desire for Indian students to study abroad is stronger than ever,” said Ashish Agrawal, Managing Director at Sequoia Capital India.
But they face several challenges, including some that present themselves after they have landed in a foreign land.
‘‘There is an increased risk for banks and other financial institutions when they engage with foreigners, so they charge more. An Indian student studying in the U.S., for instance, borrows money at an interest rate of over 13%, nearly twice what their local peers are charged. Since they don’t have a regional credit history, they can’t avail themselves of a range of financial services, including a loan or a credit card — at least not without paying a premium.
Leap is addressing the financial part by granting loans to students at a fair interest rate by evaluating the data they generated — alternative and derived — in India.
But finance is only one of its offerings. The startup has aggressively expanded its offerings to provide a broader infrastructure to enable students to pursue international higher education.
Leap has developed a community of over 1 million students where they advise each other and explore options. Leap said it had helped over 60,000 students in their study abroad journey over the last 18 months and has had its strongest fall season.
Since we last spoke about Leap, the startup has demonstrated strong growth on various fronts, said Kumar. Its community has grown (adding 100,000 students each month), the test preparation app is increasingly becoming popular, and its core financial services have surged. On top of this, the startup has expanded its offerings to help students prepare for — and land — internships when they join a college abroad, solving another challenge international students face.
